Reuters: Hot Stocks: Impregilo shares rise 18 pct on Salini merger progress

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Impregilo shares rise 18 pct on Salini merger progress Jun 25th 2013, 17:32 MILAN, June 25 | Tue Jun 25, 2013 1:32pm EDT MILAN, June 25 (Reuters) - Shares in Italy's biggest builder Impregilo rose 18 percent on Tuesday after moving closer to a merger with peer Salini and the announcement of higher than expected growth targets for the new group. The two companies' boards approved late on Monday the terms of a tie-up that will create a group with revenues forecast to grow 16 percent to $9.7 billion in 2016, with one of the largest order backlogs among European construction companies. "We have before us a global infrastructure market that will reach 1 trillion euros ($1.3 trillion), stretching from the Middle East to Asia, Australia to Africa," Impregilo CEO Pietro Salini told Reuters. "We have the know-how and we are present in 60 countries." A long battle for control of Impregilo ended this year with family-owned Salini building a near-90 percent stake in its larger rival. Salini Impregilo, as the new group will be called, will have broader shoulders to compete on foreign markets at a time when the Italian economy is mired in deep recession. The businesses expect the merger to generate annual synergies of 100 million euros. The order book would combine big projects, such as work to expand the Panama Canal and the huge Grand Renaissance dam in Ethiopia, and reach 26 billion euros by 2016. Shares in Impregilo closed up 18.4 percent at 3.15 euros, their highest level since June 4. The broader Milan index fell by 0.4 percent. The volatility of Impregilo's shares is exaggerated by the small size of its free float, at only 10 percent of the total equity. Shareholder meetings to approve the merger are due in September. Pietro Salini said that the merged company would gradually sell back to the market a further 15 percent stake to help it to return to the main Milan index. ($1 = 0.7649 euros) (Reporting by Danilo Masoni and Elisa Anzolin; Editing by David Goodman) Link this Share this Digg this Email Reprints

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