Metricon chief executive Brad Duggan and chief financial officer Jon Robson at a housing construction site.

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Australia’s biggest home builder is on the cusp of a $115m (AUD) takeover by a Japanese conglomerate.

Sumitomo Forestry on Monday put in a notice to the Tokyo Stock Exchange outlining their plans to acquire 51 per cent of Metricon, potentially before the end of 2024.

The Aussie housing construction giant has been the nation’s most prolific builder for the past nine years, and if the deal proceeds it would mean about 12 per cent of all Australian homes are built by foreign-owned companies, including other giants such as Simonds and Henley.

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Industry sources indicated that Metricon had been quietly open to a sale for as much as the past five years.

The deal has already passed through Australian competition checks and the Foreign Investment Review Board, but a handful of administrative hurdles still remain.

Metricon boss Brad Duggan assured Aussies building homes through the firm that it would be “business as usual for Metricon’s trades, suppliers, staff and customers”.

Metricon are Australia’s biggest home builder with display homes like the Waterford Rochedale in almost every state.

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Sumitomo already own a controlling stake in one of Australia’s next biggest home builders, Henley Homes, with Mr Duggan noting the Japanese firm’s “great history of owning other builders in Australia” would not change.

“Metricon has worked hard for the past 24 months to get into a really good position, and that has attracted the right partner for our future,” he said.

“So we don’t see any significant change to our trade or supply bases, or to altering the supply chains of other businesses.”

The deal also paves the way for up to 100 per cent of the firm to be sold to Sumitomo at a future date, and Metricon will be listed as a subsidiary of the Japanese firm on the Tokyo Stock Exchange.

Metricon employs about 2500 people around Australia and in the past financial year commenced about 3900 home builds nationwide.

Metricon CEO Brad Duggan at construction site in April. Picture: Richard Walker.

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The firm made headlines in 2022 after the sudden death of founder Mario Biasin, with the business owners later tipping in $30m of their own money to boost the business.

Mr Duggan said he believed a part of the attraction for the Japanese firm was the Australian government’s well publicised goal of building 1.2 million new homes in the coming five years, providing scope for significant profits from the building sector.

In the past financial year Metricon mustered a $76m turnaround from an about $30m deficit in the prior 12 months.

Mr Duggan confirmed they had been working on a deal with Sumitomo since early in 2024, but added that he believed business founder the late Mario Biasin had also hoped to one day take the construction firm he started 48 years ago to the global stage.

“It was always the plan for the Biasin family, to find a partner to be the custodian for the business,” he said.

Sumitomo Forestry Australia managing director Yasuhiro Odagane said his firm wished to boost the supply of new homes in Australia and had been expanding its footprint here since first entering the lucky country’s construction sector in 2008.

Single-level residences like the Barkly design by Metricon have become increasingly popular across Australia as the cost-of-living crisis impacts the size of homes being built.

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“This acquisition enables our group to expand the business areas in each state, establishing Sumitomo Forestry as the number one builder in Australia and, most importantly, allowing us to make a substantial contribution to the provision of social infrastructure,” Mr Odagane said.

Housing Industry Association chief economist Tim Reardon said about one in 10 Aussie homes were built by offshore-owned construction firms today, but the addition of Metricon would bring that figure to about 12 per cent.

“We have seen increased foreign ownership since the global financial crisis,” Mr Reardon said.

In many instances this had led to more vertical integration, such as members of supply chains also being bought by the international owner of builders, while prefabrication of housing components had also been increasing in foreign-owned firms.

Mr Reardon added that he was not surprised to see Metricon involved in a major deal with a Japanese firm, noting that there were very few businesses that could afford to purchase a construction company the size of Metricon.

While the backers of the deal believe the future is bright, past deals involving international takeovers of Australian builders have not always led to more homes being built.

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“One of the reasons Japan business have been seeking to purchase builders in Australia is because building activity there has stagnated due to no population growth, whereas Australia is a growing market,” he said.

While some international acquisitions of Australian builders have led to increases in their construction output, a number have also led to medium-term losses to housing construction.

When South Australian firm Rawson was acquired by Japan-based Daiwa House it was building about 1188 homes, the HIA Top 100 builders report released last week show it started just 230 in the past year.

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