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Skanska & Brown Macs tie up heavyweight deal

Finalised merger to produce a utilities contractor with annual turnover in excess of £300 million

SKANSKA is hoping last week's £50 million takeover of McNicholas Plc will turn the enlarged group into a heavyweight utilities contractor.

The deal was sealed following last minute negotiations between Skanska UK chief David Fison and Brown Macs managing director Michael Doherty.

Skanska made its move earlier this summer and the firm was poised to tie up the contract this autumn.

But Mr Doherty admitted talks went on longer than planned to sort out the details of an offer which 'had come out of the blue'. He added: 'It became slightly protracted because the company was not set up for a sale.'

Mr Doherty will stay on at the renamed Skanska McNicholas for up to two years as a non-executive director.

Finance director Graham Conroy has left. The man in charge of Brown Macs' commercial activities, Rod Bennion, will also stay on at the new firm in a non-executive capacity.

The move comes after growing speculation that Brown Macs' 65-year-old chairman, Bernard McNicholas - the son of Michael, who founded the business in 1957 - had been looking to sell his majority shareholding.

Since last year the two firms have been working together on a £400 million contract to repair the crumbling gas distribution network for National Grid under a deal known as the North London Gas Alliance.

Skanska McNicholas chairman Mike Putnam - also a main board director at the Swedish firm's UK business - said the takeover would bring Brown Macs' client base to a firm with bigger financial clout.

He said: 'It will be a big business with a turnover north of £300 million. It moves us up to a Premiership player.'

Brown Macs will turn over £180 million this year while Skanska's utilities arm generates just over £100 million of sales.

Day-to-day control of the business, which will keep the McNicholas name for another two years, will be handled by Stewart Keeble. He has already moved 200 miles south from Skanska's utilities head office in Leeds to Brown Macs' headquarters at Kingsbury in north London.

Mr Putnam said there would be no redundancies among Skanska's 600 staff nor the 1,300 at McNicholas Plc.

The firm will move some head office staff from Kingsbury to Skanska's UK headquarters in Hertfordshire by the middle of next year.