Oil and gas giant Amec is close to securing a �1.9bn takeover of Foster Wheeler

Amec set to buy Foster Wheeler for �1.9bn

Amec is set to buy America's Foster Wheeler in a £1.9bn deal combining two big players in the UK's oil and gas sector.

London-listed Amec employs 29,000 people in about 40 countries and generates annual revenues of £4.2bn from markets including energy, mining and infrastructure. Foster Wheeler has more than 13,000 staff in more than 30 countries, including in Aberdeen and its operational HQ at Reading.

The two firms already work together after recently securing consultancy contracts in Kuwait for the building of a new refinery and Amec said it has provisionally agreed the terms of a cash and shares deal to buy Foster Wheeler for $3.2bn (£1.9bn), which would create a new company valued at about £5 bn.

Amec said the tie-up with Foster Wheeler would more than double its revenues from growth regions, including through a boost in its Latin America exposure, as well as extending its capabilities in oil and gas from exploration and production to the downstream sector, as well as bring in new customer relationships.

Chief executive Samir Brikho said the potential combination was "financially and strategically attractive".

He added: "I believe it would be a compelling proposition for our shareholders, customers and employees."

The making of a firm offer is subject to a number of pre-conditions, including completion of due diligence by both parties.

The move is the latest attempt by Amec to bolster its scale, having recently failed with a £700m takeover approach for Kentz, which works on oil and gas services projects across the globe.

Foster Wheeler was formed in 1927 from a merger of two companies based in the USA – the Power Specialty Company and the Wheeler Condenser & Engineering Company, whose roots go back to 1891.

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