Fluor Tells Shareholders It Will Sell Equipment Leasing Unit

Fluor Corp. said Monday that it has decided to shed its profitable construction equipment leasing subsidiary, American Equipment Co., and has hired Merrill Lynch & Co. to advise it on the best way to do so.

“Fluor’s shareholders will benefit more” by selling the unit, said company Chairman Peter Fluor.

The company expects to complete the divestiture this year and would use after-tax proceeds from a sale to fund its ongoing share repurchase program, Fluor said.

Wall Street analysts have predicted that the equipment leasing unit could fetch more than $450 million.

American Equipment Co., which was started in 1947, is one of the five biggest equipment suppliers in the United States. It has 55 offices in 13 countries.

After initially denying reports late last year that it would sell the equipment leasing unit as part of its financial and organizational restructuring, Fluor acknowledged in mid-December that it was contemplating such action.

Monday’s announcement was made during the Irvine-based engineering and construction services company’s annual shareholders meeting in New York.