Tue, 30 May 2017 | MERGER
Wood Group has put the majority of Amec Foster Wheeler's upstream oil and gas business up for sale with the aim of getting the go ahead for the £2.2bn takeover of its smaller rival. Both companies provide services work to global oil projects.
Robin Watson, CEO of Wood Group, said the North Sea market had become "significantly smaller" in the past three years, and justified the proposed merger by saying its "remedy commitment", to sell most of the oil and gas business of Amec located in the UK and serving UK customers, should be "sufficient" to obtain clearance from the UK CMA. This is despite critics warning that Wood could face a lengthy battle to persuade regulators that a combined 60 per cent share of the North Sea market would not limit competition.
The assets Wood has proposed to sell generated revenue of £740m in 2016, out of the total £5.4bn revenue Amec posted for the year.
The proposed sale would not include its commissioning business, but could result in additional costs being incurred or in a delay to synergy benefits.
Around 4,200 people are currently employed by Amec's North Sea business, and the possibility of a sale has brought concerns over potential job losses.
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