Member Article

Amec Foster Wheeler proposes offshore sell-off to push through Wood Group acquisition

Wood Group’s massive £2.2bn acquisition of Amec Foster Wheeler has taken another tentative step towards completion after the Competitions and Markets Authority (CMA) said it would consider a proposal that could see some of Amec’s assets sold off ahead of any deal.

Aberdeen-based Wood Group had a £2.2bn all-share offer for Cheshire-headquartered Amec Foster Wheeler accepted back in March.

However, the multi-billion pound acquisition was referred to the CMA amid competition concerns that the merger might entail for the UK’s engineering and construction services as well as operation and maintenance services in the offshore oil industry.

In an attempt to head off the competition concerns, the two firms have offered to sell the majority of assets relating to Amec’s upstream offshore oil and gas business that it operates in the UK, proposals which the CMA have said ‘might be acceptable’ in helping to push the deal through.

The proposals will now be opened to a public consultation before the CMA makes a decision to approve the deal, with an in-depth investigation to follow if these latest proposals are deemed inadequate.

Kate Collyer, Deputy Chief Economic Adviser and decision maker in this case, said: “It is crucial that competition is maintained in this major UK industry.

“We will consider the undertakings offered by Wood Group and Amec Foster Wheeler further, and carefully consult interested parties, in order to make sure that they fully address our concerns.”

The CMA has said it has until 12 October 2017 to consider whether to accept the offer with the scope to extend the deadline until 7 December 2017 in certain circumstances.