Ken Henry to resign in early 2011, Lend Lease to purchase Valemus: Economy roundup

Treasury secretary Ken Henry, who spearheaded the Government’s major review into tax reform earlier this year, will step down from his post in early 2011.

His role will be taken by Martin Parkinson, who is currently the secretary of the department of climate change and energy efficiency.

Henry steps down after 10 years in the role, being reappointed in 2006 for a further five years. Prime Minister Julia Gillard has said Henry had been one of the greatest treasury secretaries.

“Dr Henry has made a major contribution to the wellbeing of Australians and the prosperity of the nation during his more than 25 years at Treasury, during 10 of which he has been Secretary,” she said in a statement.

“Dr Henry has indicated to me that he warmly welcomes Dr Parkinson’s appointment and is looking forward to taking a break after 10 years as secretary.”

Property group Lend Lease has bought Valemus Australia in a $960 million deal, to purchase the company from German group Bilfinger Berger.

The deal is expected to be earnings per share accretive in the 2012 financial year. Lend Lease shares rose nearly 4% to $8.58 in early morning trade.

“Lend Lease has acquired Valemus at an attractive price while retaining financial flexibility to fund the group’s significant pipeline,” chief Steve McCann said in a statement, adding that the company’s gearing level will be 5.8% post-acquisition.

“Valemus has a highly successful and experienced management team with diverse sector expertise that will add to the depth of our Australian management and broaden our skill set in the construction sector,” he added.

Virgin Blue chief financial officer Keith Neate has resigned today, following seven years at the airline. He has said personal reasons are the main reason for his decision.

“The aviation industry is relentless and while I have thoroughly enjoyed my time in the role I am ready to give some time back to my family before pursuing other opportunities,” Neate said in a letter to the board.

Atlas Iron will buy Giralia Resources in an $828 million cash and scrip offer, with the offer valuing the company at $4.57 per share.

Both companies have said there is a strategic and financial rationale for combining their efforts, with Atlas saying that the merged group will now grow production, slash operating costs and maximise its cashflows.

Shares higher after weak overseas leads

The Australian sharemarket has opened higher this morning, despite weak overseas leads following uncertainty of a military drill in South Korea.

The benchmark S&P/ASX200 index was up 32 points or 0.68% to 4768.8 at 11.50 AEST, while the Australian dollar was up at US99c.

AMP shares gained 0.6% to $5.33m while Commonwealth Bank shares gained 0.7% to $51.08. NAB rose 0.9% to $24.15 as Westpac rose 0.7% to $22.82.

Overseas, Japanese food group Kirin has written down the value of National Foods, dropping $467 million from the company after three years of ownership, citing difficult trading conditions.

“Conditions in both the dairy and juice sectors have eroded since Kirin purchased National Foods in 2007 and Dairy Farmers in 2008 and remain very challenging for farmers, processors and brand owners alike,” Kirin said in statement.

“The NF Group remains the core of Kirin’s integrated beverages group strategy in Asia and Oceania, and there is no change in the… long-term business framework for the Kirin Group,” the company said.

In the United States, stocks have continued to rise, with the S&P500 nearing a two-year high on the back of a renewed rush of optimism. The Dow Jones Industrial Average gained 13.78 points or 0.12% to 11,478.13.


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