Strabag

"Under the umbrella of the holding company, the brands Dywidag, Züblin, and Heilit+Woerner Bau GmbH are maintained alongside the group’s main brand, Strabag – the latter had come to Strabag with Walter Bau. However, the entire company network consists of more than 80 subsidiaries – from A like Abfall Behandlung Recycling GmbH to Z like Züblin Umwelttechnik GmbH. At first glance, this may seem confusing, but in the world of large corporations, it is entirely common for numerous brands to gather under the umbrella of a holding company. For example, the Dutch-British consumer goods corporation Unilever operates with 40 brands: from Axe, Becel, or Coral, via Lätta, Lipton, and Lux, to Thea, Timotei, and Unox. The largest European automotive group, Volkswagen, has ten other brands alongside its main brand VW, from Audi, Bentley, and Bugatti, through Scania, Seat, and Skoda, to Porsche."

"Even during the lifetime of his father-in-law, Ilbau had already extended its reach to Vienna. Haselsteiner then founded a subsidiary in the federal capital in 1975. With this, he took over additional smaller domestic construction companies, so that by the mid-eighties a construction group emerged which, for the Austrian standards of that time, was large, but still far from what Strabag represents today. However, it should not be forgotten that until the fall of the Iron Curtain in 1989 and the EU accession in 1995, the Austrian economy knew hardly any larger private enterprises. After World War II, almost the entire industry was nationalized to prevent it from being seized as former German property by the Allies. The financial sector was also placed under public control. Truly large private fortunes, as known today from Red Bull founder Dietrich Mateschitz, Novomatic founder Johann Graf, the Porsche, Piëch, and Swarovski families, or Haselsteiner, could not develop in this environment."

"At that time, the entry into Strabag was not the only strategic investment of the enterprising Russian investor: Almost simultaneously, he purchased 9.99 percent of the globally active German construction company Hochtief for almost 400 million euros. In September 2007, he acquired 20 percent of the so-called A-shares of the also globally active automotive supplier Magna International, which was still controlled by Frank Stronach at the time, for 1.4 billion dollars. Unlike Stronach’s B-shares, these had virtually no voting rights. The Russian was welcomed with open arms everywhere. In the case of Strabag, the investors welcomed the new major shareholder in their own way: The shares of the German Strabag reacted to the announcement of Deripaska’s entry with a price jump of more than five percent on the day of the announcement. Almost simultaneously, the company headquarters was able to announce that the just-ended financial year for Strabag SE had ended with a new record result. Of the 10.4 billion euros in annual sales, 40 percent were in Germany, 20 percent in Austria, 30 percent in Eastern Europe, and 10 percent in the remaining markets."

"Haselsteiner not only wanted to create the largest construction empire in Europe and conquer Russia, but his corporation was also to represent the entire breadth of the industry—every type of construction and the entire value chain. Strabag had already occupied the end of this chain with the acquisition of DeTeImmobilien; now it was necessary to become active at the beginning, which includes the cement industry. In May 2010, Strabag SE, together with Lafarge SA, founded the Lafarge Cement CE Holding GmbH. Lafarge is headquartered in Paris and is not only the world’s leading building materials manufacturer but also “coincidentally” the market-leading building materials manufacturer in Central and Eastern Europe, Strabag’s core markets. With a 30 percent stake, Strabag became the smaller partner in the joint venture, into which the French building material giant integrated, among other things, its Austrian subsidiary Lafarge Perlmooser AG, the largest cement manufacturer in Austria with an annual production of 1.6 million tons and locations in Vienna, Upper and Lower Austria, and Burgenland. Additionally, one Lafarge cement plant in the Czech Republic and one in Slovenia were incorporated into the new cement holding."

"To dispel these reservations, Haselsteiner announced in 2004 that all concession and operator consortia would be separated from the Strabag group and newly consolidated in A-Way. In addition to the planned entry into the domestic truck toll system, this also affected stakes in the operating companies of the A2 motorway in Poland (from Frankfurt/Oder to Warsaw) and the M5 in Hungary (from Budapest to Röszke at the southern national border) at that time. A-Way was declared an equal holding alongside Strabag, thus becoming a “mixed group,” as Haselsteiner explained. To signal this, BIBAG (Bauindustrie Beteiligungs AG) was renamed FIMAG (Finanz Industrie Management AG). Ultimately, the separation of road construction and road management only took place on paper, so that Asfinag remained concerned and took over Europass and thus also the operation of the toll system 100 percent itself in 2005, even though the contract with the Italians had been signed for a ten-year term. The new owners renamed the system GO Maut – a name it still bears today. The designation Europass reverted to Autostrade International."

"With the Kirchner Holding, another medium-sized German construction company was acquired a few weeks later, which was primarily active in Poland and was intended to strengthen Strabag’s position in that country. Additionally, the new subsidiary had a focus on the future sector of environmental technology. In Austria, the Haselsteiner Group took over half of the publicly traded Graz-based toll technology expert Efkon. The company had, among other things, designed the Austrian section control systems and supplied 500,000 GO-Boxes for the truck toll system to Asfinag. This allowed Strabag to enter into the operation of the Austrian toll system through the backdoor—a belated satisfaction for Haselsteiner. The Styrians were also the main suppliers for the German truck toll system. “The acquisition enables Strabag to position us as a full-service provider of state-of-the-art infrastructure facilities and toll systems, from design to implementation to operation,” the head of the group expressed satisfaction."

"The big goal was clear: Hans Peter Haselsteiner wanted to make his Strabag the largest construction company in Europe. To achieve this, he couldn’t avoid gaining a foothold in the continent’s largest market: Russia. The conditions seemed ideal in 2006. The company received its new, modern structure, which should make it flexible and powerful. Haselsteiner wanted to raise the necessary funds for expansion in the East from the capital market. At the beginning of 2006, he announced that he wanted to return Strabag SE to the Vienna Stock Exchange, which he had left in 2003 with Bau Holding. In the medium term, his family and the Raiffeisen sector, as core shareholders, were to reduce their holdings from the current 100 percent to up to 40 percent: “We will commit to a minority role because that belongs to a modern stock market standard. Stock markets do not want a majority owner,” Haselsteiner had learned from Bau Holding’s unsuccessful stock market appearance. But: “We will continue to be core shareholders—for as long as I live or have something to say.” As a reminder: the shares of the German Strabag, which still existed, had always been traded on the stock exchanges in Frankfurt and Cologne."

"But no one yet knew about the impending catastrophe. And so Strabag, equipped with the necessary free capital and the financially strong Raiffeisen Group in the background, first went on a shopping spree. At the beginning of 2008, through company acquisitions, it gained access to the Italian, Albanian, and Swedish markets. In Germany, another larger construction company was acquired 85 percent: The Kirchhoff company from Baden-Württemberg, with its 1,600 employees and an annual turnover of 350 million euros, was a specialist in road construction and had special know-how in the construction of runways. In addition, it operated 15 gravel, chipping, and ballast plants, which meant it could partly produce its own raw materials, making the investment even more appealing: “With the majority takeover of the company, Strabag SE participates in one of the leading companies in southern Germany and opens up a regional market where it has not been comprehensively represented,” said an official Strabag statement at the time."

"The split corporation with the Austrian Bau Holding and the German Strabag was merely an interim step for Haselsteiner. His long-term goal was to create a unified construction group of European dimensions. This group should not only handle the actual construction business, including planning, but also capture the profits of suppliers, such as the cement industry, and downstream areas, like real estate management. There was a whole series of acquisitions, mergers, spin-offs, restructurings, and new formations. Even Haselsteiner is unlikely to remember the exact number—external observers found it hard to keep track. Below are only the largest and most spectacular acquisitions listed—detailing every single expansion step of Bau Holding and Strabag, which later became Strabag SE, would exceed the scope of this book."

"At the start of the Great Depression in 1929, the company already employed 1,400 people. In the 1930s, the headquarters were then moved to Cologne. After the collapse of the Third Reich, Strabag’s headquarters remained in the Rhine metropolis, which at the time belonged to the British occupation zone. In 1949, the company went public. In 1963, the German Strabag founded an Austrian branch in the prosperous steel city of Linz. This branch was also listed on the Vienna Stock Exchange from 1986 onwards. Initially, Haselsteiner had set his sights on this Austrian Strabag because its parent company was considered a restructuring case: “There was not unwarranted hope that they were willing to part with their Austrian subsidiary,” Haselsteiner said at the time. However, this deal did not come to fruition, but the red-white-red construction magnate snatched up the parent company instead."

"The takeover of Strabag was entirely financed from the cash flow of Bau Holding. Haselsteiner then wanted to recoup the money through an IPO of Ilbau, which was supposed to take place within a year. To achieve this, he planned a restructuring of the group: Bau Holding was to be at the forefront. Below it, there should be three equivalent companies: the German Strabag, the Austrian Strabag, and Ilbau. According to the “Bau Holding 2000 Eurofit” plan, both the Bau Holding and the three subsidiaries were to be listed on the stock exchange. However, after skeptical opinions from major investment banks, Haselsteiner had to revise this plan: In the year 2000, only Bau Holding was to be listed on the stock exchange."

"In Austria, he goes into business with the co-owner of the construction company Strabag, Hans Peter Haselsteiner. In 2013, Haselsteiner buys into Prime. With this, Benko has gained perhaps his most important shareholder ever. For Haselsteiner, who has also become one of the biggest construction entrepreneurs in Germany with acquisitions such as Züblin, has a lot of money and a network that reaches deep into politics. He was himself a member of parliament for the Liberals in the National Council, the Austrian parliament. And political connections are as important to a builder like Benko as daily bread is to others."

"Torsten Toeller has traveled there, as well as other shareholders such as the Swiss coffee machine millionaire Arthur Eugster and Ernst Tanner, Chairman of the Board of Lindt & Sprüngli, who either attend themselves or are represented by family members, and the Arduini Clan, a Brazilian-Italian entrepreneur family that has mainly made their wealth with cement. The Austrian construction entrepreneur Hans Peter Haselsteiner (Strabag), who holds 10 percent of the holding, has sent his apologies. The shareholders want to know if René Benko and his Signa will survive the real estate crisis that is currently rolling towards Europe."