"This is not a merger, nor a sale or purchase, but a strategic partnership,” insists Jean-Marc Kieffer, chairman of the board of the CDCL group. "We regularly carry out an exercise of reflection and self-criticism while looking at the internal and external levers that we can use to develop and perpetuate our activity. The idea and the reason for this strategic partnership is to be able to take advantage of the synergies between the two groups, to strengthen them and to give ourselves a critical mass to invest in the future,” explains Max Didier, managing director of CDCL.
It should be noted, however, that the Félix Giorgetti group has taken a minority stake in CDCL's construction entity. Without revealing the precise details of this participation, it would be in the order of 30%.
The big groups develop tools for their subsidiaries, whereas we have to make the same effort, but only for ourselves.
This partnership is also explained by the need to reduce development and strategic investment costs at a time when competition is taking advantage of contributions from abroad. "This is not new, but since the end of the financial crisis, we have seen large construction groups push into the Luxembourg market, sometimes by developing subsidiaries there. The latter benefit from investments and developments of their parent company. One example is digitalisation. The big groups develop tools for their subsidiaries, whereas we have to make the same effort, but only for ourselves," explains Didier.
"We can also take the example of BIM (building information modelling, the sharing of reliable information throughout the life of a building or infrastructure, from its design to its demolition). We have developed everything in-house, whereas others benefit from developments and investments at group level. This is a completely different investment burden to bear, and one that will increase in the future, with a range of new technologies and services such as 3D printing, robotics, wooden buildings and sustainable development. Instead of making investment efforts on our own, we might as well do it together with Giorgetti in order to benefit from added value in the medium and long term by pooling our strengths," says CDCL's managing director.
Strong links already in place
The two men took the opportunity to refute any rumours of financial difficulties at CDCL group. "Our finances are doing very well, and our order book has never been so large, with projects signed for €300 million, which ensures work well beyond 2022", Kieffer and Didier say. They are in the process of finishing the last boxes to move into CDCL’s new headquarters in the Allegra hybrid wood-concrete structure in Leudelange.
At the end of December 2020, CDCL's balance sheet filed with the trade tegister showed an amount of €146m.
It is undeniable that we share the same values and ways of working.
The decision to turn to the Félix Giorgetti group was the result of intense reflection that began two years ago. CDCL had also considered a merger with several other large European groups, but the choice finally fell on the Luxembourg group founded at the end of the 19th century. "We have very strong ties that go back to our grandparents' time, and we already have a lot of projects together, and we are also joint shareholders in several companies. We did not focus on the Giorgetti group, but it is undeniable that we share the same values and ways of working,” Kieffer emphasises.
A partnership as a first step
The partnership enhances CDCL and Giorgetti’s roles as key players in the construction market. However, Didier insists that it does not create a hegemony or give the companies a stranglehold on the market. “Between us, we have almost 2,000 employees, i.e. 2.5% of the 80,000 employees in the sector,” he adds.
For the time being, this strategic partnership will be limited to the construction business. Each legal entity will remain independent, and each group will keep its identity and its brands. "In the future, there will undoubtedly be plans for a joint venture. We are not going to give everything away at the beginning. This is a first stone that we are laying here, and there will be others. We will define the evolution of this partnership together," says the chairman of the CDCL board of directors. "Perhaps more often than in the past, large-scale projects could nevertheless be carried out via a joint venture or EIG, making intelligent use of local and national resources. In the case of calls for tender, it will also be necessary to be intelligent," he adds.
The Compagnie de construction luxembourgeoise (CDCL) was founded in 1979 as a result of the merger of three companies: Camille Diederich-Colas, Pierre Bohler and Ardec (formerly Raymond Didier). Camille Diederich, co-founder of CDCL, passed away on 2 December.
This story was first published in French on Paperjam. It has been translated and edited for Delano.