Dutch based consultants Royal Haskoning and DHV are planning a merger to exploit a greater proportion of the global market and open up new opportunities for engineers, Royal Haskoning management board director Henry Rowe told NCE this week.
The two firms announced their intention to merge last week, and hope to have the deal signed by the end of June.
Rowe said the move will give the company access to new markets and sectors, adding: “We will see growth coming out of this.”
He described the agreement as “a merger of equals”, as the two companies are of similar size - DHV has 4,300 staff worldwide and Royal Haskoning has 3,700 - and both are non-listed, trust-owned businesses. Around 650 Royal Haskoning staff are based in the UK whereas DHV has only a nominal presence here.
Both firms had been looking to expand internationally, and each are strongly represented in territories where the other was weak.
“Our strategy for the next five years had been about growing and building up our international operations to become much more of a global player,” said Rowe.
1,000 Sub Sahara staff
“We were missing out on work in countries in sub-Saharan Africa, but with the merger we have 1,000 staff in the region.”
Similarly, the joint company will now have around 600 staff in India, making it a big player in the region. DHV is also strong in Indonesia, Japan and North America, while Royal Haskoning has a substantial presence in Thailand and the Middle East.
“Geographically we don’t overlap,” said Rowe. “With more staff we can make bigger in-roads into our existing markets.”
There are equivalent synergies when it comes to different industry sectors, according to Rowe. “The main cross-selling areas are - from DHV’s side - aviation and mining, which is new to us,” he said. “[DHV] is very, very strong in the aviation field, but doesn’t have a maritime operation of significance.”
Royal Haskoning is best known in the UK for its water, waste and maritime engineering expertise, which accounted for over half of its £66M UK turnover last year.
Recent UK projects include design and project management for a £29M coastal protection scheme at Borth in North Wales (NCE 15 September 2011).
In addition to the similar ownership models, Rowe said the two firms have a very good cultural fit, with openness, teamwork and integrity being important values for both companies.
Announcing the merger, Royal Haskoning chairman Erik Oostwegel, who will become vice-chairman of the new company’s executive board, said: “The synergy between the two companies is enormous. We have worked together on projects before, but this is a whole new ball game.”
DHV chairman Bertrand van Ee is set to become chairman of the executive board of the new company.
The two companies have a formal working relationship in the form of Tunnel Engineering Consultancy (TEC) - a permanent partnership between DHV, Royal Haskoning and Witteveen+Bos.
TEC worked in collaboration with Halcrow as technical advisor on South-Korea’s Busan-Koje crossing and has designed the immersed tube option for Sweden’s Fehmarnbelt crossing with Ramboll and Arup.
DHV and Royal Haskoning are also currently working together in a consortium that will devise a strategic vision for the Mekong delta in Vietnam on behalf of the Dutch government’s NL Agency.
The business created by the merger will have a turnover of around €700M (£584M), making it one of the world’s top 40 consultants, and putting it in the top 10 of independently owned, non-listed companies.
The intended name of the new company will be Royal Haskoning DHV, although the firm must apply to be allowed to continue using the “Royal” designation. Its headquarters will be in Amersfoort, the Netherlands.
The merger enables the firms to realise their growth aspirations without the need to finance expensive acquisitions.