British oil and gas engineering firm Amec has agreed to buy Swiss-based rival Foster Wheeler for 1.9 billion pounds ($3.13 billion), the first sizeable acquisition in the sector for three years. Amec said the deal would increase its position and help more than double revenues in growing markets such as Latin America and the Middle East. The firm, which provides services and equipment for the oil and gas, mining, nuclear and renewable energy sectors, said the acquisition would also add oil and gas transport and refining capabilities to its existing extraction facilities. The deal, expected to complete in the second half of this year, will end a drought of major transactions in a sector where targets’ high growth forecasts have fuelled shareholders’ expectations of big takeover premiums, making it difficult for firms to agree on price.
Its chief executive Samir Brikho said: "The combination...would be financially and strategically attractive."
The value of the two firms combined will be £5bn. Under the deal, Foster Wheeler shareholders will receive 0.9 new Amec shares and $16 in cash, valuing the Swiss group at $32 a share. Amec said it would fund the cash component of the offer through existing cash resources as well as new debt financing.
"I believe it would be a compelling proposition for our shareholders, customers and employees," added Mr Brikho.
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