Swedish giant Skanska sold its stake after closing its £358m acquisition of Kvaerner's construction arm, thereby ending its three-year deal with Costain to work on projects worth more than £20m.
Speculation was voiced in Building in the summer that Skanska would not exercise its option to buy a 40% stake and would end further co-operation.
The shares were sold to existing Costain shareholders Mohammed Abdulmohsin Al-Kharafi & Sons and Raymond International, at a £2m loss to Skanska.
Costain chief executive John Armitt shrugged off the sale. He said: "I would rather have the flexibility to be able to choose the right partner for the right job. I think we are in a stronger position than we were three years ago." He added: "It is pleasing that Skanska's 7.6% stake has been bought by two of Costain's existing shareholders, which is a clear statement of their confidence in the company." The Costain/Skanska projects are expected to account for less than 14% of Costain's turnover this year, Armitt stressed.
He said: "For work in the region of £20-50m, clients are quite relaxed for us to be alone anyway. We will not be short of other contractors to work with for jobs worth more that." Armitt said the firm was already in talks with a contractor about a roads project in Ireland.
Costain has also teamed up with Taylor Woodrow to work on the redevelopment of King's Cross Tube station, and Armitt did not rule out working with Kvaerner – now called Skanska UK after the completion of the deal last week – on future prospects.
He said the firm was reshaping to focus on its core markets of roads, water and marine work as well as major office blocks and hotels.
Armitt said: "We are seeking to become a better company, more focused on a particular sector. This [the Skanska sale] is simply another ingredient to put in the pot." The firm is also cutting its supplier base from 8000 to 800 and concentrating on contracts valued at more than £2m in a drive to increase margins.
The sale of Skanska's stake will leave Mohammed Abdulmohsin Al-Kharafi & Sons and Raymond International with 23% and 11% stakes respectively in Costain.
Skanska described the sale as a natural consequence of its Kvaerner acquisition.
Skanska Europe president Anders Karlsson said: "The relationship with Costain has been successful and well received by customers and we intend to fulfill all our commitments towards Skanska's and Costain's joint customers and PFI partners."
