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Allianz bows out of bid to acquire John Laing

UK: German insurance company Allianz has pulled out of the battle to take control of UK infrastructure group, John Laing.

UK: German insurance company Allianz has pulled out of the battle to take control of UK infrastructure group, John Laing.

The company’s US $1.8 billion (£950 million) bid was eclipsed by a slightly higher bid from rival, Henderson, earlier this month.

Henderson, a UK-based fund manager, now looks certain to secure the deal for Laing after Allianz said it could not justify increasing its offer.

Henderson is offering Laing shareholders a 5.2% premium on the Allianz proposal, taking the total value of its offer to just over $1.9 billion.

A statement from Allianz said: “We believe that our offer fully reflects the value inherent in the business and we cannot justify an increase ... to our investors.”

John Laing was formed in the village of Sebergham, 16km south of Carlisle, in the 1840s and by 1917 employed 4,000 workers. The firm now has a turnover of more than $570 million a year.

It has overseen more than 50 public sector infrastructure projects under the private finance initiative (PFI) and has become a major provider of healthcare, housing and water treatment facilities. It is also a major builder of hospitals and schools and owns the Chiltern Railways franchise.

Outside of the UK the company is involved in road building schemes in Europe and the US.

UK: Support for construction body

A five-year financial support package to set up the Scottish Construction Centre of Excellence has been agreed between Scottish Enterprise and a consortium led by the Construction Industry Research and Information Association.

The centre is intended to play a key role in helping modernisation, and act as a platform for sharing information and best practice in an industry that generates almost US $18.9 billion (£10 billion) a year, employs around 200,000 people in Scotland, and represents about 10% of the country’s gross domestic product.

The project has been earmarked for completion by 2011. UK: Keller predicts strong growth

Ground engineer Keller Group has said its 2006 results will beat analysts’ current expectations, driven by its US business and a 15% rise in orders since June.

Keller, which has worked on converting the Millennium Dome for use in the 2012 Olympics, also said it was hoping to join the FTSE 250 index of mid-sized companies in December, after seeing its shares jump nearly 7%.

The company said that profits have doubled in value in the past year, largely driven by good margins in the US, which makes up about 50% of its business. Italy: Building slowdown

The Italian construction market has entered a period of stagnation, according to Italian construction research firm CRESME.

Investments this year have reached only 0.3%, and are expected to decline even further next year.

Only the new residential building sector continues to hold strong, peaking in 2006 with a growth of 4.6%.

Other sectors within the industry are experiencing a downturn, with the exception of residential maintenance, which is showing a slight recovery, while civil engineering has declined by 1.1%, non-residential public building by 5.5% and non-residential private building by 3.9%.

China: Fines for on-site noise

Construction companies will be fined up to US $25,000 (CNY200,000) if they violate a new noise management regulation approved by Beijing municipal government.

Under the regulation, loud construction work is banned between 10pm and 8am, or during middle school or college entrance examination days.

Beijing has experienced worsening noise pollution alongside its rapid development over the last decade.

Nearly half of all environmental complaints are about noise from construction sites.

The previous noise management regulation was issued in 1984 and revised in 1997. Japan: Taisei shows triple strength

Construction firm Taisei has seen its first-half net profit more than triple from the previous year, to US $602 million (JPY7.10 billion), as Japanese firms’ invest more capital in factories.

The company said in a statement that its construction business benefited partly from strong demand overseas, especially in the Middle East, where oil-producing nations have raked in greater national revenues stemming from the surge in crude price.

The firm also said the strong earnings results reflected efforts to increase its profit margins in real estate development operations and to cut back on marketing expenses. US: Skanska ‘insures’ US place

Swedish construction company, Skanska, has been appointed as construction manager for a major office project in Chattanooga, Tennessee.

The US $189 million contract involves the building of new headquarters for insurance firm BlueCross BlueShield.

The project includes five new office buildings and a large parking facility.

The office section will be built over 88,000m2, while the parking area will take up 130,000m2.

Construction of the project begins this month and is scheduled for completion in early 2009.

US: Oil giants plan home growth

At least three major oil companies are planning to expand their refineries in the US. BP recently announced a US $3 billion plan to expand its Whiting, Indiana plant to increase its production capacity by 15%, while Marathon Oil Company is considering modifying its refineries in Detroit, Michigan and Catlettsburg, Kentucky. Marathon has also approved a $3.2 billion project to increase the capacity of its Garyville, Louisiana refinery by nearly three quarters, to a total capacity of 425,000 barrels of oil a day.

Chevron Corporation has also announced plans to expand its refinery in Pascagoula, Mississippi, by about 15%.

BP and Marathon plan to start construction next year, while Chevron is aiming at 2008.

Zambia: Smelter work to begin

The long-awaited construction of a US $200 million (ZMK780 billion) smelter in the Zambian town of Chambishi is set to get underway, following the signing of an agreement between China Nonferrous Metal Mining (CNMC) and the government of Zambia.

The smelter will produce 800,000 tonnes of finished copper a year.

CNMC bought Chambishi mine in 1998 and has so far invested over $150 million in the operation. The mine was officially opened in 2003.

In November 2004, the company began to construct a leaching plant at a cost of $15 million.

Hong Kong: CCCG plans IPO China Communications Construction Group (CCCG), the state-owned port and road builder, plans to raise as much as US $2 billion (HKD15.5 billion) in an initial public offering in Hong Kong.

The company, which also manufactures port machinery such as container cranes, will sell about 24.5% of its share capital for between $1.5 billion and $2 billion.

Proceeds will be used to buy construction equipment for roads and ports, reduce debt and boost production at its container-crane factory in Shanghai.

CCCG was set up after the restructuring and merging of state-owned conglomerates China Harbour Engineering Company and China Road and Bridge Corporation.

Japan: Firms form foreign JVs

General Electric and Hitachi have formed joint ventures for nuclear power plant construction and maintenance projects in Japan and the US.

The two companies will supply present-generation boiling-water reactors and develop a next-generation version.

Demand for nuclear power is gearing up in the US, as volatile oil and natural gas prices make nuclear a more appealing power source.

Hitachi will have an 80% stake in the Japanese joint venture, with GE holding the remaining 20%. In the US, Hitachi will take up a 40% stake and GE will own 60%.

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