Engineering giant Amec has launched a multi-billion takeover bid to buy Swiss energy industry contractors Foster Wheeler as it looks to increase its midstream and downstream audiences.
The $3.2billion (£1.9billion) deal, which would be financed through Amec’s existing resources and new debt, would also see the British project management group listing on the US stock market.
Foster Wheeler provides engineering and equipment for the energy, chemical and pharmaceutical industries, and has worked on a number of major projects – including the Fadhili gas development in Saudi Arabia.
“The combination of our two businesses, AMEC and Foster Wheeler, would be financially and strategically attractive,” said Amec chief executive Samir Brikho.
“As well as positioning us across the whole oil & gas value chain and providing scale in our growth regions, we would expect double-digit earnings enhancement in the first twelve months.
“I believe it would be a compelling proposition for our shareholders, customers and employees.”
Foster Wheeler said that it had agreed with Amec not to solicit any rival takeover bids until February 22, but would not comment further on the terms of the takeover.
Amec was first linked with a bid for Foster Wheeler, whose UK base is in Reading and has offices in Aberdeen, late last year, after having failed in a bid to buy Kentz. Brikho offered at the time to redistribute cash to shareholders if the company did not secure a major acquisition.
Amec estimates the deal, which would see the company offering $32 per share, would ultimately result in savings of at least £45million a year, and increase the company’s presence in Latin America. It is offering £968million in cash and the rest in new shares for Foster Wheeler, who would have two non-executive directors on Amec’s board.
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