Two of the north-east’s biggest energy industry names are on course to become one company on Wednesday, it was announced yesterday.
International oil and gas service company Wood Group, of Aberdeen, said its £606million takeover of smaller city rival PSN was nearly complete after successful navigation of the UK merger control process.
The deal was cleared recently by the Office of Fair Trading, which decided not to refer it to the Competition Commission.
Wood Group, which employs more than 29,000 people in 50 countries, said at the start of this month it was within a few weeks of completing the takeover but no date was given at that time.
The merger of the two Aberdeen firms in Wood Group’s largest acquisition to date will create the UK’s biggest oil service company. It is also be the biggest takeover involving two Granite City businesses.
Fast-growing PSN was formed five years ago, when management of KBR Production Services took ownership of the operation.
The plan is for Wood Group’s production facility arm to merge with PSN, resulting in a unit employing more than 22,000 people worldwide.
The total workforce of Wood’s enlarged company will jump to about 38,000 when PSN’s 8,500 staff are added in.
PSN chief executive Bob Keiller will join the main board, subject to the takeover completing, as CEO of new division Wood Group PSN.
Wood Group, which re-entered the FTSE 100 Index of top UK blue-chip companies after an absence of several years, is also close to completing the sale of its well-support business to the oil and gas arm of US conglomerate General Electric for about £1.8billion. That move allows the company to pay off debt it has taken on in the acquisition of PSN.
In February, Wood Group chairman Sir Ian Wood said he expected the firm to make several other acquisitions, including one worth more than £60million, within a year.
He was speaking after Wood Group posted a 3.9% drop in pre-tax profits for 2010 to £156.8million, compared with £163.3million in 2009, on revenue up by 2.8% at £3.1billion.
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