The board of directors of Veidekke has mandated the group management to prepare a plan for how a split of Veidekke into two entities can be carried out in order to provide the best possible basis for growth and development in its business units and to optimise shareholder value over time. In the opinion of the board of directors, Veidekke's current valuation does not fully reflect the value of today's business and a split is believed to contribute to increasing the company's shareholder values. This is supported by a recently received request from a serious player with a specific interest in purchasing the property development operation.

The driving forces for value creation for the property development operation diverge from those of Veidekke’s other business areas. Changes in the organisation and ownership structure will expand the operational and financial scope for action. The mandate provided by the board of directors implies that alternatives under consideration include a stock exchange listing, distribution of the shares to Veidekke's shareholders, and divestment of all or part of the property development operation. Veidekke has retained ABG Sundal Collier and the law firm Schjødt as the company's financial and legal advisers.

“Veidekke continuously strives to optimally develop and position all our business areas for long-term strategic and financial success. A split of Veidekke into two focused entities will enable each entity to pursue growth strategies tailored to their markets, resulting in profitable growth that creates value for customers, employees and shareholders alike, says Jimmy Bengtsson, CEO of Veidekke.

“After many years of solid growth and profits, Veidekke is at a crossroads where we believe further development is best safeguarded through two independent companies. The board’s decision thus marks a major step forward in facilitating increased long-term value creation for Veidekke's shareholders, says Svein Richard Brandtzæg, board chair of Veidekke.

Veidekke's property development operation is one of Scandinavia's largest residential developers, with a land bank of more than 18,000 units in and around the largest population centres of Norway and Sweden. As at 30 September, the book value of the company's assets was NOK 8.2 billion and total invested capital amounted to NOK 6.6 billion. At year-end 2018, Veidekke estimated the market value of the land plots owned by the company to significantly exceed the book value, with excess value being mainly related to the Norwegian property development operation. The company has initiated recalculation of the value of the total land bank and residential portfolio.

“The time has come to give the property development operation a more independent role. Establishing two separate entities could provide a more optimal financing structure and scope, and thus facilitate increased value creation and growth for both entities,” says Jørgen Wiese Porsmyr, Executive Vice President and responsible for project development in Scandinavia.

The board expects to make a final decision on the transaction model in the first half of 2020.