Dragon deal

3 July 2003 By Rob Cox Follow @rob1cox

That coup d etat means Dragados shareholders will never know whether someone else would have paid them more. Not surprisingly, the share ratio in this longexpected construction merger favours ACS, which crept into control a year ago.

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Actividades de Construccion y Servicios (ACS) offered to buy the remaining twothirds of rival building firm Grupo Dragados for E2.1bn on Thursday. ACS, which already owns 33.5% of the company, offered 33 shares for every 68 shares in Dragados. Fiftyfour new ACS shares will be issued to Dragados shareholders, representing 46% of the share capital of the new group. The merger will cancel 34.88% of Dragados's share capital, including 33.49% of the capital currently owned by ACS and 1.39% of Dragados's treasury stock.

Annual savings are expected to be E75m after taxes for the two companies. Together they will have a market value of E5.5bn.

Merrill Lynch and Lazard are advising ACS, while Goldman Sachs and Salomon are advising Dragados.

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