61407
UK Wood Group to Buy Rival Firm for $2.7b
Energy

UK Wood Group to Buy Rival Firm for $2.7b

British oilfield services company John Wood Group has agreed to buy Amec Foster Wheeler in a deal valuing its smaller rival at about $2.7 billion and averting a planned $600 million rights issue.

Companies in the industry have had to adjust to lower prices after oil tumbled from a peak of over $100 a barrel in 2014, Reuters reported.

The paper deal valued Amec Foster Wheeler shares at 5.64 pence each and they traded close to that level. Wood Group shares also responded positively, gaining 5% to $10.

Amec Foster Wheeler, itself the product of a 2014 merger, said it had been planning to announce a rights issue next week and to announce the suspension of dividend payments to cut costs and boost cash flow. The rights issue has been suspended.

"The combination represents a transformational transaction for Wood Group, which accelerates our strategy and creates a global leader in project, engineering and technical services delivery across a range of industrial sectors," said Wood Group Chairman Ian Marchant.

Amec Foster Wheeler investors will own 44% of the merger group but Wood Group executives will take the top jobs.

Wood Group Chief Executive Robin Watson and Chief Financial Officer David Kemp will keep the same jobs in the new group. Wood Group Chairman Marchant will also retain his role. Wood Group said it expected annual cost savings to reach at least $135 million, while the one-off costs would be around $230 million.

 

Short URL : https://goo.gl/FA7jeS
  1. https://goo.gl/6iu3S2
  • https://goo.gl/Djhzaz
  • https://goo.gl/skTu86
  • https://goo.gl/rKjwqu
  • https://goo.gl/hBJovw

You can also read ...

US Intimidates Iraq to Kill Siemens Deal in Favor of GE
The Trump administration intervened to quash a $15 billion...
More Iranian Oil Tankers Head to China
An unprecedented volume of Iranian crude oil is set to arrive...
Asia Natural Gas Prices Rising
Asia's liquefied natural gas prices are set to go up on the...
Turkey Refiner Seeking Waiver for Iran Sanctions
Turkey’s top refiner, Tupras, is in talks with US officials to...
Iran Awaits CNPC Decision on South Pars
Terminating its contract to develop Iran's giant South Pars...
Iran: Contract Signed to Boost Oil Output in Sirri Region
Crude oil production in Sivand, Esfand and Dena offshore...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus