Wood Group acquires Amec Foster Wheeler

ABERDEEN, March 13, 2017 – Wood Group and Amec Foster Wheeler on Monday announced they had reached an agreement on the former’s all-share offer for the acquisition of Amec Foster Wheeler.

Working with a closing price of GBP 7.52 per share, the deal is valued at GBP 2.225 billion (USD 2.71 billon). The new combined entity will be headed by Wood Group executives, with Robin Watson and Ian Marchant continuing as CEO and chairman, respectively.

“By leveraging Amec Foster Wheeler’s and Wood Group’s combined asset life cycle services across project delivery, engineering, modifications, construction, operations, maintenance and consulting activities, the Combined Group will be able to better capitalise on growth opportunities across a broad cross section of energy and industrial end markets,” Marchant said in a reaction.

His counterpart at Amec Foster Wheeler, John Conolly, said, “the Amec Foster Wheeler Board believes that a combination with Wood Group adds to the standalone prospects of Amec Foster Wheeler, by accelerating the delivery of the future value inherent in the Amec Foster Wheeler business and, at the same time, helps to realise the full potential of each of Amec Foster Wheeler and Wood Group.”

By year-end 2020, synergies between the two companies’ activities should have resulted in GBP 110 million in savings. However, there will also be one-off costs of around GBP 190 million to achieve these synergies during that period.

Amec Foster Wheeler has seen a decline in revenue and trading profit over the past three years. In figures accompanying Monday’s announcement, the company said revenue over 2016 had come out at GBP 5.44 billion, marginally less than the GBP 5.45 posted over the year prior. In 2014, revenue was recorded at GBP 5.8 billion.

Trading profit figures show a similar trend, falling from GBP 457 million in 2014 to GBP 374 in 2015. Last year, Amec Foster Wheeler saw a trading profit of GBP 318 million. Its biggest business segment is oil, gas and chemicals, followed by power and process.

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