The UK’s competition watchdog is still considering Wood Group’s takeover of Amec.
The Competition and Markets Authority (CMA) warned earlier this month that the £2.2billion deal could face an in-depth probe if the companies fail to address antitrust issues.
The two firms have offered up new terms, which include selling the majority of Amec’s upstream business, in bid to smooth things over.
A CMA spokesperson said: “The Competition and Markets Authority (CMA) conducted an investigation into the merger and found competition concerns in the supply of engineering and construction services and operation and maintenance services in the UK.
“In order to address the CMA’s competition concerns the companies have offered to sell off almost all of Amec Foster Wheeler’s assets which contribute to these services in its Upstream Offshore oil and gas business in the UK.
“The CMA considers there are reasonable grounds for believing that these undertakings, or a modified version of them, might be acceptable and it will open a public consultation on the offer in due course.
“As part of its process, the CMA will undertake a public consultation.”
The CMA has until October 12 to decide if that is sufficient. If it falls short, the deal would be referred for an in-depth investigation.
Kate Collyer, deputy chief economic adviser and decision-maker in the 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
Wood Group and Amec both hailed the CMA’s statement as a step in the right direction.
Robin Watson, chief executive of Wood Group, said “Today’s announcement is an important milestone and gives us further confidence in our ability to complete the transaction in quarter four this year.”
Jon Lewis, chief executive officer at Amec Foster Wheeler, added: “We welcome the announcement by the CMA. Our offer of a proposed remedy in May and the early commencement of the sale process to potential buyers of the upstream oil and gas business has ensured we have navigated this process ahead of schedule increasing the likelihood that the transaction with Wood Group will close in quarter four this year.”
When announcing the deal in March, Aberdeen-based Wood Group said it will result in “significant cost and revenue synergies” of at least £110 million a year.
Wood Group employs 29,000 people while Amec has 35,000 workers and the new entity would be valued at around £5 billion.
