Construction company China Communications Construction International (CCCI) has signed an agreement to buy the business and assets of John Holland Group from Australian construction company Leighton Holdings for approximately A$1.15bn ($951m).
Leighton Holdings executive chairman and chief executive officer Marcelino Fernández Verdes said: "In June 2014 we announced that, as part of our strategic review, we were analysing options for our services, property and John Holland businesses, including the potential divestment of, or introduction of, new partners to these businesses.
"The divestment of John Holland demonstrates the progress we have made with our strategic review initiatives over the past six months to strengthen the balance sheet, streamline the operating model and improve project delivery."
The value for John Holland was decided following a comprehensive and extensive global sale process.
According to Leighton, the divestment of John Holland will allow the company to focus on reducing gearing and improving its balance sheet.
The company plans to use the sale proceeds to finance future growth, particularly in public private partnerships (PPP).
The existing management of John Holland will work with CCCI to ensure a smooth transition, allowing the business to continue to safely provide services to its clients.
Following the sale, which is set to reduce Leighton's gearing by around 10%, 4,100 of 5,000 workers will transfer to the new business.
CCCI, the wholly owned subsidiary of China Communications Construction Company (CCCC), will finance the payment through internal cash resources and bank borrowings.
The sale is subject to customary approvals, including by the Foreign Investment Review Board.
Image: John Holland's Malampaya Concrete Gravity Structure in Philippines. Photo: courtesy of Leighton Holdings Limited.