x

Abu Dhabi, UAEFriday 21 September 2018

UK casts doubt on takeover of Amec Foster Wheeler 

Regulator says planned move by oilfield services firm Wood Group could hurt competition

Wood Group's plan to take over Amec Foster Wheeler would hurt competition, says UK watchdog. Ty Wright/Bloomberg
Wood Group's plan to take over Amec Foster Wheeler would hurt competition, says UK watchdog. Ty Wright/Bloomberg

Britain's market regulator said on Wednesday a takeover of Amec Foster Wheeler by the oilfield services firm Wood Group could hurt competition.

Wood Group agreed to buy smaller rival Amec Foster Wheeler for £2.2 billion (Dh10.68bn) in March.

Britain's Competition and Markets Authority (CMA) said that the merger could lead to competition concerns in the supply of engineering and construction services and operation and maintenance services on the UK continental shelf.

Wood Group has until August 9 to formalise its proposals for addressing concerns about the deal or it will be referred for an in-depth probe, the CMA said.

Wood Group said that when the deal was announced that it had proposed to the CMA a divestment of a majority of Amec Foster Wheeler's upstream oil and gas assets and operations in the United Kingdom.

Wood Group said on Wednesday that it would formally submit the proposal to the CMA and both companies believe that this would be sufficient to address CMA's competition concerns and obtain clearance for the merger.

However, the undertakings excluded Amec's Aberdeen-based services unit Qedi. The assets identified in the undertakings generated 42 million pounds in core earnings on revenue of about £740 million in 2016.

Separately, the UK's Serious Fraud Office said last month it had launched a bribery investigation of Amec.

Shares in Wood Group were down 0.57 per cent and Amec Foster was off 0.75 per cent as of 1242 GMT.

* Reuters

RELATED ARTICLES
Recommended