Government of Canada Rejects Aecon Sale to CCCI

TORONTO, May 23, 2018 /CNW/ - Aecon Group Inc. (TSX: ARE) ("Aecon" or the "Company") was informed today that the Governor in Council has issued an order under the Investment Canada Act directing CCCC International Holding Limited ("CCCI") not to implement its proposed acquisition of Aecon. As a result, the Arrangement between Aecon and CCCI will not proceed.

"While we are disappointed with the government's decision, Aecon is and will continue to be a leading player in the Canadian construction and infrastructure market," said John M. Beck, President and Chief Executive Officer, Aecon Group Inc. "Through our proposed transaction with CCCI we had outlined a vision in which Aecon would be better able to compete with the many large global construction companies actively working in Canada. The deal offered considerable benefits to Aecon and its various stakeholders. While we have been prevented from pursuing the transaction, we are moving forward from a position of strength. Over the past several months Aecon has secured numerous large-scale projects, has a record backlog, and a significant pipeline of opportunities ahead of it."

Aecon reported a backlog of $4.6 billion at the end of the first quarter, which included $910 million of new contract awards booked in the quarter. Subsequent to the end of the first quarter, Aecon announced that:

• a partnership in which Aecon has a 24 per cent interest finalized a $5.0 billion contract for the Réseau express métropolitain Montréal Light Rail Transit project. The project will add $1.2 billion to Aecon's backlog in the second quarter of 2018; and
• a consortium in which Aecon has a 33.3 per cent interest in the equity and construction and a 50 per cent interest in the 30-year maintenance agreement, secured the contract for the Finch West Light Rail Transit project in Toronto. Total contract is valued at $2.5 billion, which includes $1.2 billion in construction costs. This project will add $400 million to Aecon's backlog in the second quarter of 2018.

As previously disclosed in Aecon's first quarter 2018 results, the Company continues to expect revenue growth and adjusted EBITDA margin improvement in 2018 versus the prior year. The overall outlook is positive with areas of strength in Aecon's business in infrastructure, nuclear, telecom, gas and power distribution, expected to outweigh the impact of fewer opportunities in commodity and oil related markets. Aecon's balance sheet continues to be well-capitalized and the Company is confident in its ability to increase capacity as required to facilitate growth.

"We are fortunate to have a strong market position, effective industry partnerships, and outstanding employees, all of which will help drive our future success," Mr. Beck said.

Aecon will remain publicly traded on the Toronto Stock Exchange and its headquarters will continue to be in Toronto, with regional offices in Calgary and Vancouver. As would have been the case if the transaction had proceeded, management of the company is not expected to change.  The company has reinstated its search for a new Chief Executive Officer. Mr. Beck will remain as CEO until his successor has been selected.

"Our dedicated board of directors, who were recently re-elected at Aecon's May 10P^thP Annual General Meeting, remain committed to providing ongoing guidance and governance to drive shareholder value and work in the best interest of the Company," said The Hon. Brian V. Tobin, P.C., O.C., Aecon's Chairman. "The board is also focused on the ongoing CEO search to select the right leader to guide the company in the future."

The Special Committee of the Board of Directors has been dissolved and, while Aecon's Board considers strategic options in the best interest of the Corporation from time to time, Aecon is no longer actively pursuing a sale process.

ABOUT AECON

Aecon Group Inc. (TSX: ARE) is a Canadian leader and partner-of-choice in construction and infrastructure development.  Aecon provides integrated turnkey services to private and public-sector clients in the Infrastructure and Industrial sectors, and provides project management, financing and development services through its Concessions segment. For more information, please visit aecon.com and follow us on Twitter at @AeconGroup.

STATEMENT ON FORWARD-LOOKING INFORMATION

The information in this press release includes certain forward-looking statements. Although these forward-looking statements are based on currently available competitive, financial and economic data and operating plans, they are subject to risks and uncertainties. In addition to general global events outside Aecon's control, there are factors which could cause actual results, performance or achievements to vary from those expressed or inferred herein including risks associated with an investment in the common shares of Aecon and the risks related to Aecon's business, including, but not limited to interest and foreign exchange rates, global equity and capital markets, business competition and operational and reputational risks, including Large Project Risk and Contractual Factors, Risk factors are discussed in greater detail in the section on "Risk Factors" included in the Company's Annual Information Form dated March 27, 2018,  which is available through SEDAR at www.sedar.com. Forward-looking statements include information concerning possible or assumed future results of Aecon's operations and financial position, as well as statements preceded by, followed by, or that include the words "believes", "expects", "anticipates", "estimates", "projects", "intends", "should" or similar expressions.  Other important factors, in addition to those discussed in this document, could affect the future results of Aecon and could cause its results to differ materially from those expressed in any forward-looking statements. Aecon assumes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

SOURCE Aecon Group Inc.