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9th November 2014

Global Economy & Global Real Estate

Brookfield Venture Wins $8.5 Billion Contract Over SNC

Source: Bloomberg / News

Canada’s federal government selected a joint venture between Johnson Controls Inc. (JCI) and Brookfield Property Partners LP (BPY) to manage property under eight-year contracts valued at about C$9.6 billion ($8.5 billion).

Brookfield Johnson Controls Canada LP will replace SNC-Lavalin Group Inc. (SNC) of Montreal, whose agreement with the government expires March 31, said Annie Trepanier, a spokeswoman for Public Works and Government Services Canada, in an e-mailed message today.

The award to Brookfield Johnson Controls caps a “competitive procurement process” and includes an option to extend the deal by up to six years and add other unspecified assets for a total potential value of C$22.8 billion, the public works department said yesterday in a statement published after the close of markets. Units of SNC-Lavalin and CBRE Group Inc. also bid on the work, Trepanier said.

Services covered by the contracts include the management of about 3,800 government buildings, facilities and land nationwide, the public works department said.

Canada will probably save at least C$20 million a year through the award, and additional efficiencies may result from the increased number of buildings covered by the deal, the public works department said.

SNC-Lavalin, Canada’s biggest engineering and construction company, said Nov. 6 it would cut 4,000 jobs as slowing economies in some emerging markets compound a global mining slump. The cutbacks amount to about 9 percent of the company’s workforce.

-By Frederic Tomesco