In a bid to satisfy investors, after what had been described in some circles as “over-reach”, Lendlease has taken steps to withdraw from some of it’s biggest markets in the US and Europe.
While conditions had been ripe for further growth, having expanded aggressively in the late 1990s with acquisitions like Bovis, the inflationary lens has placed pressure on already thin-margin territories like the UK.
Not long after Lendlease announced the strategic shift, they released a statement stating that terms had been agreed with Consigli for the sale of their US East Coast construction operations. As outlined at Lendlease’s Strategy Update on 27 May 2024, the sale is consistent with the Group’s objective to divest its construction businesses in the US and UK during the next 18 months, lowering the Group’s overall risk profile.
Lendlease CEO Tony Lombardo said “Today’s announcement represents another step to simplify Lendlease to create a more focused company for securityholders. It’s the culmination of more than 12 months’ work refining our US construction activities to focus on the US East Coast where we have a clear competitive advantage.
“The sale represents a great outcome for both our people, the majority of whom will move across to Consigli, and for our customers.”
A condition of the refocus will be to scale projects back up in Australia, with $27 billion of early stage projects to add to its existing $13 billion pipeline. However, earnings may take years torecover following the sales of assets and restructuring.