The Boards of Clough Limited and Forge Group Limited report the intention to create a new Strategic Alliance to jointly target project opportunities in the LNG / oil and gas sectors and to support Forge’s anticipated continued growth.

The Strategic Alliance will be underpinned by Clough becoming a cornerstone shareholder in Forge, creating an alignment of interests that aims to generate substantial benefits for both companies in FY11 and beyond through a material, positive impact on their earnings.

The Strategic Alliance and cornerstone shareholding will be facilitated through a series of transactions for a potential maximum investment by Clough of approximately $98 million.

1 Subject to: (i) Forge shareholder approval of the Placement to Clough; (ii) the 50% proportional takeover offer by Clough being made and becoming unconditional; (iii) the level of acceptances under the Offer; and (iv) the acquisition of 3 million Forge options from existing Forge optionholders. 2 Also subject to Forge shareholder approval of the placement to Clough.

The Strategic Alliance will formally be triggered in various circumstances, including when Clough’s interest in Forge reaches 31% or the Offer is declared unconditional by Clough.

Clough and Forge believe the Strategic Alliance will allow both companies to leverage their complementary expertise and to capitalise on significant growth opportunities in the oil and gas, mining and civil infrastructure sectors. Key target markets are Australasia and West Africa.

Tags: Clough Limited, Forge Group Limited