Wood Group Completes Foster Wheeler Deal (Update)

(Adds final two paragraphs about AFW UK disposal)

Global engineering company Wood Group has completed the acquisition of Amec Foster Wheeler and announced the start of share trading on October 9. CEO Robin Watson said the "transformational acquisition creates a global leader in the delivery of project, engineering and technical services to energy and industrial markets." It received its final regulatory approval just over a month ago.

Watson said that the new company would "deliver significant cost synergies and incremental revenue synergies in a less cyclical business which retains a predominantly reimbursable, asset light model with a balanced risk appetite."

Holders of ordinary shares of £0.50 ($0.66) each in the capital of Amec Foster Wheeler (AFW) will receive 0.75 of an ordinary share of 4 2/7 pence each in the capital of Wood Group, in exchange for each AFW share now being cancelled. 

As of October 6, Ian McHoul, Linda Adamany and Roy A Franklin have been appointed to the Wood Group Board as non-executive directors. Franklin is already a non-executive chairman of Premier Oil, effective September 1, resigning as non-executive director of Santos with effect from September 30.

To satisfy the terms of the purchase, Wood Group had to dispose of the UK oilfield services division, AFW UK, which Australian engineering group WorleyParsons is now buying. It is seeking to raise money for the A$303mn ($235mn) acquisition.

WorleyParsons said October 9 the acquisition would provide it with a "robust entry" into the UK North Sea market and accelerate the company's strategy to become a global provider of maintenance and operational services."

William Powell