views updated


1 cours Ferdinand-de-Lesseps
92851 Rueil-Malmaison Cedex,
Telephone: ( + 33) 1-47-16-35-00
Fax: ( + 33) 1-47-51-91-02
Web site:

Public Company
1899 as Giros et Loucheur
Employees: 115,000
Sales: EUR 17.33 billion (2000)
Stock Exchanges: Euronext Paris
Ticker Symbol: DG
NAIC: 541330 Engineering Services; 234120 Bridge and Tunnel Construction; 234110 Highway and Street Construction; 234930 Industrial Nonbuilding Structure Construction; 234990 All Other Heavy Construction

The big got bigger when GTM Group agreed to be absorbed into Vinci in October 2000, making the latter the worlds largest construction, public works, and concessions company, with revenues of more than EUR 17 billion. Vinci, formerly known as Societe Generale des Entreprises (SGE) and spun off from parent Vivendi (formerly Societe Generale des Eaux) in 1999, operates as a holding company for its subsidiaries, structured under four primary business areas. Concessions, generating 8 percent of sales, includes parking subsidiaries Sogeparc and GTM Pare; toll-road operations through Cofiroute; and other operating concessions for various facilities, including the Stade de France in Paris, the Tagus river crossings, and a number of bridges and airports around the world. The Energy and Information division, accounting for 20 percent of total sales, features GTIE, itself a grouping of some 700 local businesses. The companys Roadworks division includes the Eurovia and Jean Lefebvre subsidiaries, which combine to form 30 percent of Vincis annual sales. Construction represents Vincis largest single division, with 42 percent of revenues, and combining the activities of subsidiaries Campenon Bernard, Dumez-GTM, Feyssinet, GTM Construction, and Sogea.

Founding a Construction Giant for the 20th Century

Vinci traces its origins to the beginning of the 20th century. In 1899, Alexandre Giros and Louis Loucheur formed Giros et Loucheur, a small construction company dedicated to public works projects. The company quickly became known as Girolou, which served as the companys telephone number. Giros and Loucheur eyed greater growth in the early 1900s, as France prepared to enter a period of modernization. The restructuring of the countrys infrastructure, spurred on the growing use of electricity, automobiles, and other new inventions of the late 19th and early 20th century created new demands for large-scale public works projects and for the companies that could build them. In 1908, Giros and Loucheur changed the name of their company to the more imposing Societe Generale des Entreprises (SGE) and set out to become one of Frances largest construction companies.

SGE participated in a number of Frances most important public works projects, ranging from the construction of factories, such as the building of the Comines factory in 1922, to the works for the hydroelectric industry, such as the construction of the Chastang dam on the river Dordogne, completed in 1955. SGE also branched out into other areas related to the construction industry, such as electrical installations and power generation. These diversified activities brought the company under the sway of Compagnie Generale dElectricite, one of Frances largest companies and eagerly seeking to expand its own construction and public works operations since the French government had nationalized the electrical power industry in the late 1940s.

Compagnie Generale dElectricite began the process of transforming SGE into a holding company for its varied construction, public works, and related projects. In 1970, SGE received control of the engineering, construction, and public works activities of its parent company, while Compagnie Generale dElectricite took over SGEs electrical business and added it to its CGEE-Alsthom subsidiary. Ten years later, Compagnie Generale dElectricite once again expanded SGE on a grand scale, merging it with another of its subsidiaries, Sainrapt et Brice. The new company, which took the form of a holding company overseeing the extensive operations of both companies, became known as SGESB.

By then, SGE had already added an important new component, that of highway construction and toll road concessions, as France began construction of its Autoroute network. SGE took part in the formation of Cofiroutelater building a majority shareand took over the operations and concessions of the A10 Paris-Poitiers highway and the All Paris-Le Mans highway. Cofiroute was to extend its highway operations through the 1970s and 1980s, becoming one of Frances top toll road operators.

Constructing a Construction Leader in the 1980s

While many of Frances industries were undergoing an ambitious nationalization program under the government led by Francois Mitterand, the countrys major companies were playing a particularly French form of musical chairs, as the companies transferred their shareholding positions among a number of entities, including SGESB. As such, by 1984 SGESB had come under the majority control of a new owner, diversified conglomerate Saint Gobain, which had achieved its majority position through the transfer of the main pieces of its Enterprise division. By the mid-1990s, SGE had re-simplified its name and added a number of new company names to its list of holdings, including Saunier Duval, Tunzini, Wanner Isofi, and Sobea.

This last company, a construction and public works specialist, had originally been founded as Etablissements Girault in 1878. In 1918, after coming under control of the Pont-a-Mousson group (itself later merged into Saint Gobain), the company took on the name Eau et Assainissement. The company went on to develop expertise in hydraulics and civil engineering projects as well as major construction projects. After its merger with another water services company, Socoman in 1961, it took on the new name of Socea, before becoming the lead company of the newly merged Saint Gobain-Pont-a-Mousson groups Entreprises et Services in 1970. The addition of rival Balency-Briard, in 1979, gave the company a new name, Sobea.

In 1985, the newly enlarged SGE merged its existing construction and public works subsidiary, SGE-BTP, with its new Sobea assets, creating the new company Sogea, one of the worlds top ten construction companies. Three years later, SGE was to find itself under new managementand expanded to a new scale. The acquisition of majority control of SGE by the French industrial and water services group Générate des Eaux (later Vivendi) was accompanied by two immediate steps. The first was the purchase, by Générate des Eaux, of Saint Gobains insulation and heating and air conditioning subsidiary, G + H Montage, which not only added its expertise, but gave SGE a strong entry into its new subsidiaries German domestic market. The second move by Générate des Eaux was to transfer its own construction and public works subsidiaries, including Viafrance, Campenon Bernard, and Freyssinet, to SGE.

Freyssinet had taken its name from civil engineering genius Eugene Freyssinet. One of 20th-century Frances leading bridge and industrial building designers, Freyssinet had also developed a new form of pre-stressed concrete that made possible new types of large scale construction techniques. The Freyssinet company, originally known as the Societe Technique pour 1Utilisation de la Precontrainte (Stup), was formed in 1943 in order to exploit an exclusive right to use the prestressed concrete. Stup quickly expanded onto the international scene, and became known worldwide for such construction projects as the Caracas Viaducts in Venezuela, the bridge over Lake Pontchartrain in the United States, a series of bridges over the Marne river, and many others. The loss of the companys prestressed concrete monopoly encouraged Stuprenamed Freyssinetto diversify its activities in the 1960s and 1970s, in particular into the construction subcontracting category. The companys diversification continued into the 1980s, leading to the construction of nuclear power facilities, the Gladesville bridge in Australia, the Montreal Olympics complex, and more.

When Freyssinet came under control of Générate des Eaux, it found itself in the company of another Générate des Eaux subsidiary, Campenon Bernard (which had joined in the founding of Stup). Campenon had been founded in the 1920s by Edme Campenon and Andre Bernard. The company presented diversified interests from its start, with construction projects ranging from railroad and highway construction to industrial facilities. Campenon Bernard was also largely responsible for the building of structures for the famed Maginot Line defense system. The companys diversified interests enabled it to become one of pre-World War II Frances largest public works companies. In the postwar period, Campenon Bernard was highly active in helping to reconstruct the damage to Frances infrastructure, before turning its attention to international expansion. Apart from construction of many of the worlds largest bridges, the company also became a prominent builder of nuclear power facilities, as well as developing expertise in constructing tunnels and viaducts.

Company Perspectives:

With a presence in more than one hundred countries, VINCI is the worlds leading company in construction and associated services, operating through its 2,500 local business units, for the most part in Europe, where it does more than 90% of its business.

World Leader for the 21st Century

Campenon Bernard became a spearhead for SGEs expanded construction and public works holdings. In 1992, SGE transferred its Sogea subsidiarys operations to Campenon Bernard, which then became known as Campenon Bernard SGE. By then, SGE had been undergoing its own international expansion drive in the run-up to the unification of the European Unions economic interests. In 1989, SGE acquired 55 percent of the United Kingdoms Norwest Holst, a position the company was to increase to 100 percent control in 1991, after expanding Norwest Holst in 1990 with the addition of fellow U.K. company Rosser & Russell. SGE also looked across the French border to Germany, where it acquired OBG and VU, the first a construction company, the latter a roadworks company, both based in the former East Germany. SGE continued to acquire companies in that part of Germany, taking over MLTU and OBAG in 1992. SGEs German acquisitions were to continue into the mid-1990s, with the takeovers of Controlmatic and Klee.

Back home in France, SGE was also expanding its holdings, notably with the purchase of highway group Moter, based in the south of France. Through its Campenon Bernard SGE subsidiary, SGE was meanwhile posting a number of construction triumphs, such as the 17-kilometer-long Vasco de Gama bridge in Lisbon, the first nuclear power plant built in Chinas Daya Bay, and the completion of the Normandy bridge in 1995. That year also marked the award of the contract to conceive and build the Stade de France in Paris, which was completed for the Soccer World Cup in 1998. In 1997, Campenon Bernard SGE took control of the French and European operations of the construction business of CBC, another Générate des Eaux subsidiary, giving SGE a greater balance between its construction and civil engineering operations, while also strengthening its international presence. Nonetheless, nearly 95 percent of SGEs business came from Europe, and some 75 percent of its business was Generaled among France, Germany, and the United Kingdom.

The transition from SGE to Vinci began in earnest in the late 1990s. In 1997, Générate des Eaux began a reorganization process that was to transform it into Vivendi (and later Vivendi Universal). As part of this process, SGE was refocused on its core construction, public works, concessions, and related services operations, and a number of its assetsincluding its waste management subsidiaries, water distribution operations, real estatewere transferred to Générate des Eaux. At the same time, Générate des Eaux shifted a number of its holdings under SGE, including its GTIE and Santerne electric works subsidiaries. The transfer increased Générate des Eauxs holding in SGE to more than 85 percentwhich Générate des Eaux then reduced to just over 50 percent by the end of that year.

As Générate des Eaux became Vivendi, SGE itself was preparing to be launched as an independent company for the first time since the mid-1960s. In 1998 and 1999, SGE began its own restructuring of its holdings, grouping its subsidiaries under four divisions: Concessions, Equipment (which then became Energy and Information), Road Works, and Construction. SGE accompanied its reorganization with a new commitment to external growth. Beginning in 1998, the companys subsidiaries began to make a series of important acquisitions, including Freyssinets purchase of Terre Armee Internationale in 1998; three fire protection companies, Calanbau, Mecatiss, and Vraco in 1999; and then Menard Soltraitement, Teerbau, the German roadworks leader, and lastly, the French parking garage and parking lot leader Sogeparc.

In February 2000, Vivendiwhich, after its merger with Universal and acquisition of Seagrams, was in the process of redefining itself as a world-leading communications and entertainment companysubstantially reduced its remaining holding in SGE, selling another 32 percent of its shares, reducing its holding to just 17 percent. By the end of that year, Vivendi had all but exited from SGEs capital. The companys newly acquired independent status, as well as its increasing interest in global development, led it to change its name to Vinci in May 2000.

In October 2000, Vinci took on an entirely new scale, when it reached an agreement to acquire another leading French construction and concessions company, GTM Group. That acquisition catapulted Vinci to the top of its industry, making it the worlds leading construction group, ahead of fellow French company Bouygues, with more than EUR 17 billion in 2000 revenues.

Principal Divisions

Vinci Concessions; Vinci Roads; Vinci Energy and Information; Vinci Construction.

Principal Competitors

AMEC plc; AutostradeConcessioni e Costruzioni Autostrade S.p.A; Bechtel Group Inc.; Colas S.A.; Eiffage S.A.; HOCHTIEF A.G.; Louis Berger Group Inc.; Philipp Holzmann Group; Schneider Electric S.A.; WS Atkins Plc.

Key Dates:

Giros et Loucheur is formed.
Company changes name to Societe Générate des Entreprises (SGE).
SGE is acquired by Compagnie Générate de lElectricite (CGE).
Subsidiary SGE acquires parent CGEs construction and roadworks operations.
SGE, still a subsidiary of CGE, merges with Sainrapt et Brice to form SGESB.
Conglomerate Saint Gobain takes over SGESB.
Industrial and water services giant Générate des Eaux acquires SGESB, which merges with diversified construction subsidiary Campenon Bernard.
SGE (its name shortened once again) transfers waste management, real estate, and water distribution subsidiaries to Générate des Eaux.
Vivendi (Generale des Eaux) exits SGE shareholding; SGE renames itself Vinci; Vinci acquires GTM Group.

Further Reading

Le Goff, Delphine, La Renaissance de la SGE, Strategies, June 16, 2000.

Le nouveau groupe Vinci-GTM va jouer la carte des concessions a 1international, La Tribune, July 18, 2000.

Vinci nouveau numero un mondial de la construction, Le Figaro Economie, July 13, 2000.

Vinci to Launch Bid for GTM In Euro 1.83 Billion, All-Share Deal, Wall Street Journal, July 14, 2000.

M.L. Cohen