July 4, 2019 / 6:39 AM / 13 days ago

YIT to sell paving, quarries business to Sweden's Peab

* YIT says debt-free purchase price EUR 280 mln

* Sees capital gain of about EUR 40 mln

* About 1,700 staff to transfer to Peab under deal

STOCKHOLM, July 4 (Reuters) - Swedish construction group Peab will buy Finnish peer YIT’s Nordic paving and quarries businesses for 280 million euros ($316 million) to expand in the Nordic region and enter the Danish paving sector.

YIT, Finland’s biggest construction firm, said the sale of the business was expected to generate a capital gain of about 40 million euros and would see roughly 1,700 staff transferred to the Swedish company once the deal was finalised.

It said the deal would reduce seasonal earnings volatility and boost its balance sheet.

YIT also revised its 2019 financial guidance down to reflect the sale, which is subject to regulatory approvals, forecasting adjusted operating earnings for continuing operations of 150-210 million euros, lowering the range by 20 million.

The deal, which would expand Peab’s business across Sweden, Norway and Finland, will allow it to take over some 200 quarries and 63 production asphalt plants in the Nordic reigon. Peab will not assume any debt as part of the deal.

It said it expected the deal to be completed on Jan 1. ($1 = 0.8864 euros) (Reporting by Niklas Pollard, editing by Deepa Babington)

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