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Jan 20 (Reuters) - New Zealand's Fletcher Building FBU.NZ said on Tuesday it will sell its construction division to a unit of French infrastructure firm VINCI SA SGEF.PA for NZ$315.6 million ($182.76 million).

The construction arm is one of Fletcher's industry segments that caters to building and maintenance services in infrastructure projects across New Zealand and the South Pacific.

The divestment comes after the construction materials maker's 2025 earnings were hit due to lower demand in its materials and distribution division, which sells construction and plumbing as well as cement and concrete products.

In its 2025 annual report, the firm also flagged challenging economic conditions across New Zealand and Australia, including subdued construction activity, which had dented its full-year bottom line.

The construction arm has created some major issues for the broader group, and was once at the centre of a lawsuit by casino company SkyCity Entertainment SKC.NZ over delays in completing the construction of the International Convention Centre in Auckland.

The deal, still awaiting regulatory greenlight, is expected to go through before the end of calendar year 2026.

Fletcher added that the final enterprise value of the deal could rise to NZ$334.1 million, subject to a few contracts for the division that were currently under negotiation.

The divestment of Fletcher Construction Holdings to VINCI Construction comprises three local business units, Fletcher added in its statement.

($1 = 1.7268 New Zealand dollars)

(Reporting by Shruti Agarwal in Bengaluru; Editing by Nia Williams and Andrea Ricci)

((Shruti.Agarwal@thomsonreuters.com))