Wood Group takeover completes as Amec sells North Sea operations
The deal will see Amec bank £228 million for selling the upstream oil and gas operations to Australian firm WorleyParsons.
Wood Group’s £2.2 billion takeover of Amec Foster Wheeler has been completed after the latter agreed to offload the majority of its North Sea operations.
The deal will see Amec bank £228 million for selling the upstream oil and gas operations to Australian firm WorleyParsons as part of a move to address competition concerns.
It comes after the Competition and Markets Authority (CMA) expressed fears that the takeover gave rise to antitrust issues surrounding the supply of engineering and construction services, as well as operation and maintenance services in the North Sea.
In 2016, Amec’s North Sea business contributed revenues of £740 million and a trading profit of £43 million.
The move to sell the assets off effectively cleared the way for the completion of the takeover.
Robin Watson, chief executive of Wood Group, said on Monday: “This transformational acquisition creates a global leader in the delivery of project, engineering and technical services to energy and industrial markets.
“We expect to deliver significant cost synergies and incremental revenue synergies in a less cyclical business which retains a predominantly reimbursable, asset light model with a balanced risk appetite.”
When first announcing the takeover in March, Aberdeen-based Wood Group said it will result in “significant cost and revenue synergies” of at least £110 million a year.
Wood Group employs 29,000 people while Amec has 35,000 workers and the new entity would be valued at around £5 billion.