Walter Bau Raises Stake in Züblin

The third-biggest construction company in Germany, Walter Bau, said Tuesday it was merging with the fifth largest, Ed. Züblin, to create a new firm employing 18,000 people. Walter Bau has raised its share in Ed Züblin from 48.75 percent to 92 percent by buying the stake of a family shareholder. The value of the shares deal was not revealed. The deal will give Walter Bau annual turnover of around €4 billion ($5 billion), closing the gap on its biggest rivals in the struggling German construction sector. Market leader Hochtief has turnover of €11.5 billion, and the number two, Bilfinger Berger, has turnover of €5.2 billion. The deal is a volte-face for Walter Bau, which originally wanted to sell its share in Züblin in order to reduce debt. It abandoned that plan after failing to find a buyer in what has been a depressed sector in Germany for a decade since the real estate bubble of the early 1990s burst. The construction industry's overall turnover plummeted from €117 billion in 1995 to €83 million last year and thousands of jobs have been shed during that period. The new merger is the latest in the sector, which saw the Holzmann group go bust and a number of other companies bought up or go into liquidation.(AFP)