Scottish energy services giant Wood Group is to take over rival PSN in a £600million-plus deal, the Press and Journal can reveal today.
The merger of the two Aberdeen firms would create the UK’s biggest oil services company and would be Wood’s largest acquisition to date.
It would also be the biggest takeover involving two Granite City companies.
Fast-growing PSN was formed less than five years ago and its bosses are expected to share £150million in Wood shares and cash.
PSN chief executive Bob Keiller is understood to have the biggest individual stake among his company’s workforce and he is in line for £30million of this total.
The deal is expected to see Wood’s production-facilities division merged with PSN, with Mr Keiller heading up this enlarged operation and also taking a seat on the Wood board.
There is understood to be no threat to PSN or Wood jobs at home or abroad, with growth anticipated in the merged unit.
PSN employs 8,500 people in 28 countries, with nearly a third of them working in Aberdeen or the North Sea.
Wood employs more than 29,000 people and operates in 50 countries. It has more than 6,000 working in the Granite City or the North Sea and more than 300 in Glasgow.
The acquisition is expected to be announced officially to the stock market this morning.
The deal is likely to come under the scrutiny of various regulatory bodies at home and abroad because of the size of the merged operation.
Wood and PSN declined to comment on the sale when contacted yesterday.
Wood’s chief executive is Allister Langlands, while its chairman is Sir Ian Wood – who has turned a fishing firm into one of the UK’s biggest energy services groups over the last four decades.
It has a current stock market valuation of more than £2.5billion.
There has been frequent talk recently about possible deals in the oil services sector.
Only last month, there was speculation that Wood could be a £3billion-plus target for US oil-field services giant Halliburton.
PSN has had a successful time since being formed in 2006, when management of KBR Production Services took ownership of the operation.
The unit was sold to its bosses by Halliburton in a deal worth more than £150million.
Last month, it beat Petrofac and Wood to win a £300million-plus contract with Shell UK.
PSN is to provide integrated services to eight Shell assets – seven platforms and one floating production vessel – in the central and northern North Sea.
The contract is held by the Sigma 3 joint venture, which involves PSN, Wood Group and Amec, but it emerged in February that Shell was re-tendering Sigma 3 work in an attempt to cut costs.
More than 1,000 people are employed by Sigma 3 and they were to transfer to PSN when the contract changes hands next May.
It was the second big North Sea contract PSN had landed from Shell in less than four months. It was announced in July that the Aberdeen company was to carry out a near-£200million contract for decommissioning work in the Brent field.
Wood has also announced major contract wins recently.
Just last week, it revealed a Middle Eastern deal worth more than £500million. Petroleum Development Oman awarded a seven-year engineering and maintenance services contract to joint venture Wood Group-CCC.
The previous week, Wood announced a £564million contract. The group’s gas-turbine service division is to build Israel’s largest private power station for Dorad Energy.