AMEC sold

Wood Group buys engineer Amec Foster Wheeler in 'opportunistic’ £2.2 billion deal.

Aberdeen-headquartered Wood Group is to purchase engineer Amec Foster Wheeler in an all share, £2.2 billion deal. Wood Group chairman Ian Marchant described the combination as ‘transformational, accelerating our strategy and creating a global leader in project, engineering and technical services.’ The deal will create an ‘asset-light, largely reimbursable’ business of greater scale and capability across the oil and gas and other segments.

Amec Foster Wheeler’s shareholders will become shareholders in the combined group and will, ‘gain from the enhanced operating capabilities, and synergies, a stronger balance sheet and from Wood Group’s progressive dividend policy.’ Pre-tax cost synergies from the deal are put at £150 million per annum by the end of the third year. A report in the Financial Times described the deal as ‘particularly opportunistic’ in view of Amec’s £1 billion plus net debt.

Those interested in Wood Group’s transition from a small Aberdonian fishing business to an international oil and gas behemoth, should listen to the 2013 BBC podcast interview, where Ian Wood describes pitching the North Sea to his skeptical fisherman dad. Download the 80 page proposal here.

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