Wood Group Completes Takeover of Amec Foster Wheeler

---

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Wood Group's (LSE:WG) (Aberdeen, Scotland) £2.2 billion ($2.7 billion) takeover of rival engineering firm Amec Foster Wheeler plc (NYSE:AMFW) (AFW) (London, England) has been completed.

The deal creates one of the world's largest engineering groups servicing the power, oil and gas, mining and chemicals sectors. Supported by the shareholders of both companies, AFW will have a 44% share in the new company.

The final stumbling block to the deal was overcome this week when AFW agreed to sell the majority of its U.K. North Sea operations to the European arm of WorleyParsons (North Sydney, Australia) for a cash consideration £228 million ($300 million). In 2016, the business contributed revenues of £740 million ($975 million) and trading profit of £43 million ($56.7 million) to AFW. The purchase represents a robust expansion of WorleyParsons' interest in the U.K. North Sea sector.

Robin Watson, chief executive officer of Wood Group, commented: "We become a business of significant scale and enhanced capability delivering services across a broader range of geographies and sectors. 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."

The sale of AFW's upstream business was necessary to appease the U.K.'s competition watchdog, the Competition and Markets Authority (CMA). It feared that the deal could harm competition in the supply of engineering and construction services, and operation and maintenance services. Industrial Info reported on the proposed solution in September. For additional information, see September 18, 2017, article - U.K. Approves Wood Group Takeover of Amec Foster Wheeler and the March 15, 2017, article - Wood Group Bids $2.7 Billion For Rival Amec Foster Wheeler.

Regarding its purchase of Amec Foster Wheeler U.K., WorleyParsons Chief Executive Officer Andrew Wood said: "AFW U.K. represents an attractive acquisition for WorleyParsons. AFW U.K. is a world-class integrated solutions business with ... an excellent track record of international expansion."

The company stated that North Sea oil and gas reserves represent a significant sum for the Scottish and U.K. economy, and that although "barrel prices have seen a sharp decline in the last two years, the sector is seeing signs of a rebound".

Industrial Info recently covered the company's latest financial results and provided an overview of some the company's leading projects in the power, services and infrastructure, and minerals and chemicals sectors. For additional information, see August 24, 2017, article - WorleyParsons Grows Global Backlog to More than $4 Billion, Despite Many Projects Wrapping Up.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.