Leighton Holdings CEO Hamish Tyrwhitt and chief financial officer Peter Gregg have both been terminated, effective immediately, as majority shareholder Hochtief increases its stake in the company to 74 per cent.
Hochtief CEO Marcelino Fernandez Verdes has been appointed to replace Tyrwhitt.
While the Leighton Board has appointed two more directors nominated by Hochtief, Pedro Lopez Jimenez and Jose Luis del Valle Perez.
The move comes after Hochtief launched a $1.2 billion bid to increase its interest in Leighton to almost 75 per cent from 58.77 per cent.
Verdes said the German-based company’s decision to increase its shares would provide market certainty, SMH reported.
It said it intended to increase its representation on the Leighton board regardless of the outcome of the offer. A request Leighton agreed to recognising Hochtief could achieve board control at the May 19 annual general meeting.
The deal follows negotiations between Hochtief and Leighton's independent non-executive directors, who asked the majority shareholder to offer a takeover bid for all shares, but Hochtief declined.
Instead the pair agreed to a deal in which Hochtief increased its offer to $22.50 per share for three out of eight shares.
Leighton said the offer is a premium of 35.1 per cent over the three month volume weighted average price to March 7, the last trading day before the offer.
Shareholders on the register on March 21 will be entitled to receive a 60c per share dividend, payable on April 4.
Directors Paula Dwyer, Russell Higgins and Vicki McFadden will resign as directors by the AGM and Michael Hutchinson will stand for election at the meeting.
Robert Humphris will remain as independent chairman with a casting vote.
The board is made up of five non-executive independent directors, four non-executive Hochtief nominees and the CEO.
"In difficult circumstances, the independent directors have secured an improved offer which, we believe, is the best outcome for Leighton’s shareholders and employees," Humphris said.
“Hamish and Peter have both been outstanding leaders of our business, having successfully brought Leighton through a period of stabilisation and set the company on a pathway to growth by substantially rebasing our operations.
“Employees, clients and shareholders have, and will continue to, benefit from the value they have created.”
Spanish construction group ACS owns more than 50 per cent of Hochtief and is aiming to create a streamlined global company.
It has previously stated that Leighton’s businesses such as Thiess, John Holland and Leighton Contractors could be "more efficiently structured."
ACS announced on Wednesday that Verdes would take over the top job when current CEO Florentino Perez steps down.