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13 March, 2017 - 10:24 By Tony Quested

Amec Foster Wheeler goes to Wood Group for £2.2bn

Robin Watson of John Wood Grroup

Scottish energy services company John Wood Group plc is paying £2.2 billion to acquire Amec Foster Wheeler in an all-share deal agreed by both boards.

Amec, a UK multinational engineering and project management business, has substantial operations in the East of England helping to drive its international project portfolio. John Wood Group has local operations in Bedford and Great Yarmouth.

The deal represents a 15 per cent premium to Amec’s closing share price the day the deal was struck. Amec would hold around 44 per cent of the combined group and Wood Group the 56 per cent majority stake.

The companies are forecasting cost synergies of £110 million a year – maybe more – as well as strong revenue growth resulting from the integration of their respective capabilities.

It is understood that Amec Foster Wheeler has been reviewing a number of initiatives to add financial muscle; a £500m rights issue mid-March was one of the options floated.

Steered by chief executive Robin Watson (pictured), John Wood Group plc is anchored in Aberdeen but has East of England operations in Bedford and Great Yarmouth; its key markets are oil & gas, clean energy, industrial, and power generation. The group generates around $5bn sales and operates in more than 40 countries.

Hot on the heels of the takeover, Amec again showed its pulling power by revealing a new £125m contract to provide long-term support to EDF Energy Nuclear Generation – a deal that could generate annual revenues of up to £30m.

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