ACS and Hochtief Unite to Create Construction Powerhouse

Spanish conglomerate ACS Group and German construction giant Hochtief, have announced the merger of their US subsidiaries, Flatiron Construction and Dragados.

This strategic consolidation will create Flatiron Dragados, set to become the second-largest civil engineering and construction company in the US.

ACS, a global infrastructure developer and Hochtief, a leading construction services provider, aim to leverage their combined expertise and resources to enhance market position and operational efficiency.

The merger reflects a broader trend in the global construction industry towards consolidation, as companies seek to achieve economies of scale, streamline operations and bolster their competitive edge in an increasingly challenging market environment.

Flatiron Dragados’s leadership and ownership structure
ACS Group and Hochtief have collaborated on several high-profile projects globally. Including the Elbe Philharmonic Hall in Hamburg, a cultural landmark.

Separately, ACS has worked on the Queensferry Crossing in Scotland, while Hochtief contributed to the Al Rayyan Stadium in Qatar for the 2022 FIFA World Cup.

Now, Flatiron Dragados is poised to become a dominant player in the North American infrastructure market, with a presence in 24 US states and eight Canadian provinces.

The newly formed entity, Flatiron Dragados, will leverage the strengths of both companies to enhance their market position and operational efficiency.

Flatiron is a Colorado-based firm known for its expertise in transportation and infrastructure projects. Dragados, meanwhile, is a subsidiary of ACS Group, with a strong presence in large-scale civil engineering works across North America.

Flatiron Dragados simplifies the group’s structure and stakeholder relationships, and also promotes administrative and financial synergies.

The new company will be led by an experienced management team. It includes Peter Davoren, current Chairman, CEO and President of Turner Construction (another Hochtief subsidiary), who will be Chairman. Javier Sevilla, CEO of Flatiron, will take on the role of CEO for Flatiron Dragados.

Ownership of the integrated company will be split between ACS Group (61.8%) and Hochtief (38.2%), reflecting the existing relationship between these construction giants.

ACS Group already holds more than 75% of Hochtief’s shares, further solidifying their partnership in this venture.

Flatiron Dragados’s market impact and future prospects
With combined revenues of US$6.1bn in 2023 and US$3.1bn in the first half of 2024, the new entity is well-positioned to take on major infrastructure projects across North America.

The merger builds upon an existing history of collaboration between Flatiron and Dragados, who have previously worked together on high-profile projects such as the Harbor Bridge in Corpus Christi, Texas, and the California High-Speed Rail project.

This established relationship is expected to smooth the integration process and enhance the company’s ability to secure and execute large-scale projects.

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