Fluor has completed the strategic review process it commenced during the second quarter, concluding that the sale of two of its businesses will simultaneously improve its financial stability and allow the remaining businesses to refocus on engineering, construction and maintenance services in core markets.
The Irving-Texas based company is 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 said it anticipates these actions to generate in excess of $1 billion in aggregate proceeds.
The company also anticipates $100 million in overhead reductions as a result of leadership changes following the review, 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,” Fluor said in a statement.
“These actions are expected to improve the speed of decision making and drive greater accountability within the businesses.”
The company said it continues to reinforce recently revised project pursuit criteria for all businesses, including for its energy and chemicals segment to pursue lump sum work only when there is a limited bid slate and there is a quantifiable advantage over other bidders or where it is a sole-source negotiated agreement.
“Fluor will only bid on lump sum projects where it executed the front-end engineering and design package or has the opportunity to perform sufficient diligence,” the company said.