Fluor Corporation announced the results of its strategic review and operational review. As a result of the strategic review, the company concluded that the divestitures of select businesses will simultaneously improve the financial stability of the company and allow the remaining businesses to refocus on engineering, construction and maintenance services in core markets. The company is initiating plans to sell its construction equipment rental company (AMECO) and its government business and to monetize surplus real estate and non-core investments. Fluor anticipates these actions to generate in excess of USD 1bn in aggregate proceeds.
The strategic review evaluated the entire portfolio of businesses including Stork, COOEC-Fluor Heavy Industries and NuScale. The company has taken deliberate and constructive action on these investments:
Stork continues to implement its restructuring plan and is expected to emerge as a stronger and more profitable business in early 2020.
The results of the operational review led to key leadership changes, the development of improved pursuit criteria and a new organizational structure. The company will shift to a model in which business groups have direct control over the functions that support operations. As a result of these and other changes, the company anticipates overhead reductions of USD 100M.
The board recently elected Thomas Leppert and David Constable as new board members. Leppert and Constable both bring significant capital project experience to the board.
The board also formed a Commercial Strategies & Operational Risk committee that will be chaired by David Constable. The purpose of the committee is to provide guidance to management with respect to the company’s commercial strategies and provide oversight of the company’s project-related risk governance framework and risk appetite.
Lead director Peter Fluor has stepped down as chair of the organization and compensation committee and has informed the company that he will not stand for re-election next year.
Lazard is serving as an advisor to Fluor Corporation.
