Oilfield rivals could swoop for Wood and Amec assets
The Financial Times reports that the UK’s Petrofac and Canada’s SNC-Lavalin are among the companies closely watching the situation after Wood and Amec last week announced they are to form one of the largest North Sea oil and gas operators.
Under the terms of the deal, Amec shareholders will own 44 per cent of the new business that would look to be a “leaner and more competitive combined group”.
But industry executives told the FT that Wood and Amec may be forced to sell some overlapping assets to overcome competition concerns. It’s thought that clients served by both firms could also look for alternative suppliers so they are not reliant on the merged group.
“They are the number one and two North Sea players so there will be competition issues,” one executive told the newspaper, who said his company had already had an approach from two large international oil groups looking to diversify their supply chain beyond just Wood and Amec.
“Regulators may force them to sell assets but customers will not wait for someone in Brussels to tell them who they can do business with,” the executive added. “They will make up their own minds about how much business they want with one company.”
It is unlikely that either Montreal-based SNC-Lavalin or Petrofac are looking to launch counter-bids for Amec. Instead, SNC is said to be interested in Amec’s nuclear business and Petrofac was described by analyst Ashley Kelty as lacking the “firepower” to deploy a full alternative bid.
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