SNC Lavalin completes Dh10.2bn takeover of Atkins
The combined group will have more than 19,000 employees in the Middle East and Africa
SNC Lavalin, Canada’s biggest engineering and construction company, has completed its acquisition of British construction consultancy Atkins in a deal worth C$3.6 billion (Dh10.19bn).
The deal will create a professional services and project management business with annual revenues of C$12bn and more than 50,000 employees, according to SNC Lavalin. Both companies have a major presence in the Middle East, and the combined group will have more employees (19,625) in the Middle East and Africa region than any of three global regions in which it it operates.
About 17,000 of these currently work for SNC Lavalin – many of whom joined the business when the company acquired specialist oil & gas company Kentz three years ago.
The buy-out of Atkins increases the SNC Lavalin’s customer base, geographic reach and scale, making it “a true global player with more balanced revenue coverage worldwide,” the company said. The accord will allow it to develop its position in the infrastructure, rail & transit, nuclear and renewable markets. It will also improve the quality of its earnings, bringing in about $C3.5 billion worth of “comparatively high-margin” revenue. It expects to earn about 20 per cent of its C$12bn (about C$2.4bn) revenue from the Middle East and Africa.
SNC Lavalin said that the deal will lead to about C$120 million worth of cost savings – C$30m of which it expects to come from its own business, and C$90m from Atkins. These will largely be generated by eliminating corporate and listing costs, as well as “optimising corporate and back office functions and shared services”, streamlining IT systems and combining offices, where appropriate.
The firm said it has a “strong record of successful integrations”.
“We are now a true global player that is in a stronger position to offer clients complementary and a wider breadth of expertise, capabilities and services," said Neil Bruce, the president and chief executive of SNC Lavalin. "We are thrilled to welcome the employees of Atkins and the tremendous talent they will bring to our combined company. Together, we will become part of a larger global organisation that will open the door to new opportunities for further growth and development.”
SNC Lavalin will continue pursuing its aim of becoming one of the top three firms in its industry, he added.
“Joining SNC-Lavalin will provide us with the ability to offer our clients and employees the enhanced scale, capabilities, expertise and other benefits that come with being part of a larger and stronger global company,” said Heath Drewett, the group finance director of Atkins.
A number of high-profile mergers have taken place in the construction and engineering sector in recent years as firms attempt to become global operators. Aecom completed a US$6bn takeover of rival firm URS in October 2014, the same month that WSP completed an £820m buyout of the US-based consultancy Parsons Brinckerhoff from the British contractor Balfour Beatty. Arcadis, which is headquartered in Amsterdam, has acquired Hyder and the project management firm EC Harris, and the firm that is currently the world’s third-biggest consultancy, WorleyParsons, recently rebuffed a takeover offer from Dubai-based Dar Group.
Updated: July 3, 2017 07:57 PM