A12 motorway operated by Autoestrade near Genoa.Federico Bernini / Bloomberg

More than 250 journalists from around the world connected at the end of February to the ACS annual results presentation, something unusual. The company was about to complete the sale of its Cobra industrial division to the French group Vinci for which it will soon enter almost 5,000 million euros and, faced with questions about what he was going to do with the money, Florentino Pérez, its president, He summed it up in a few words: highways and renewable energy.

Two months have passed and the future of the Spanish giant made up of 44 companies, 180,000 employees and 35,000 million in sales is about to be decided. If it is expensive, its offer of up to 10,000 million for the 88% that Atlantia owns in Autostrade per l’Italia (ASPI) will be successful and will form, together with its subsidiary Abertis (where the Benetton family is also a partner, the largest shareholders de Atlantia), the largest concession group on the continent by adding 3,000 kilometers of toll roads. A dream come true for the Spanish construction group.

If tails, ACS will have to look for other places to use the money from the sale, since it has decided that there will not be an extraordinary dividend for the operation. But always keeping in mind what Florentino Pérez said: that he will not put a single euro to buy airports or expand his participation in the most important construction subsidiaries that he owns, such as the Australian Cimic or the German Hochtief.

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In between, another event shook the markets these months: the one appointed as heir to the group by Florentino Pérez, Marcelino Fernández Verdes, took a step back by announcing his intention not to continue as CEO to concentrate on directing Hochtief, in a move that it sounded like a covert cessation. Until last fall, Fernández was the head of Cimic, which under his management suffered heavy losses due to investments made in the Middle East. The successor is unknown, although names like José María Castillo Lacabex, CEO of the industrial activity, sound like. Meanwhile, the company is silent. “ACS has 180,000 people, there is a lot of bench,” cite industry sources downplaying the decision. “If it is going to end up being a kind of holding company, ACS may not need a regular CEO.”

The analysts consulted believe that the turnaround, made in the midst of the pandemic, is credible and that it will significantly soften the company’s risk profile. Because in order to get the best credit ratings, rating agencies (Moodys, Fich, S&P) demand a lot of cash from construction companies and little or no liabilities. But if the group adds more businesses with recurring income, such as concessions, its leverage could rise smoothly in the credit note.

“Let’s see what happens with the offer. ACS has the advantage that it can capture value with the construction of new highways and their operation ”, summarizes Ángel Pérez from Renta 4. From GVC Gaesco, Rafael Fernández de Heredia also observes synergies between the concessions business and the construction business. “We will see how the operation is articulated, there are many unknowns. They have to convince the Italian Government ”. Precisely to win the favor of Mario Draghi’s Executive, who can veto the operation as strategic, the group is willing to integrate its offer with that of the other ASPI suitor, the public Cassa Depositi e Prestiti (CDP). “In ACS they do not want to go alone,” cite sources close to the operation. “With the support of CDP they would have a financial partner and they would go as an industrial partner.” In addition, Abertis not only has toll roads in Spain, it also has assets in Latin America or the United States. And, the same sources add, “they have something differential: the operation improves the business of Atlantia’s shareholders who are not the Benettons. [en referencia a Appia Investments, que tiene el 6,94%, y el Fondo de la Ruta de la Seda, con el 5%]”.

The renewable pillar

The future for ACS also has a greener side, as José María Castillo explained to journalists in the presentation of results. “We have 25 gigawatts in development in our portfolio.” They are both in conventional wind energy and in marine and photovoltaic. In the Peninsula, ACS has more than 2,000 megawatts in its portfolio and is confident that floating mills are the future. But to develop this business and achieve, as they hope, have six gigawatts completed in the next four years they will need to invest 1,500 million annually. In this business they also work with alliances. Together with Vinci, ACS will create a company to which they will contribute – at market price and once they are finished, connected to the grid and ready to produce – all the renewable assets developed by the industrial division, for at least eight years and a half. Vinci will have 51% of political and economic rights, and ACS, the remaining 49%.

What they do not expect to touch in the construction group is the services division, the one that contributes the least money to the result, but the one that generates the most jobs (about 75,000 jobs). And in terms of construction, they plan to continue operating as before, especially since the governments’ reconstruction plans in the face of the pandemic will mobilize huge sums of money.

In short, the Italian battle looks decisive. ACS believes it has all the cards in its favor. Curiously, she also believed it in 2006 when, shortly before the appointment of former judge Antonio Di Pietro as Minister of Public Works in the Romano Prodi Government, she was convinced that Abertis would merge with Autostrade. Di Pietro arrived and with a stroke of the pen frustrated the operation when the Spanish woman had already put the champagne to cool.

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