The Competition and Markets Authority CMA has today determined that the acquisition of Amec Foster Wheeler by Wood Group gives rise to competition concerns in the supply of engineering and construction (E&C) services and operation and maintenance (O&M) services on the UK continental shelf.
Recognising the potential for today’s decision, Wood Group had previously made a proposal to the CMA of a remedy.
The proposed remedy was in respect of assets and operations of Amec Foster Wheeler that represent the majority of Amec Foster Wheeler’s UK upstream oil and gas business located in the UK and serving UK customers.
Wood Group will now formally submit the remedy proposal to the CMA. The CMA will provisionally decide whether this remedy proposal is sufficient by August 16, 2017 at the latest, with its final decision due by October 11, 2017.
Both Wood Group and Amec Foster Wheeler consider that the proposed remedy is sufficient to address the CMA’s competition concerns and to obtain clearance. The M&A process for this remedy is said to be at an advanced stage. Amec Foster Wheeler commenced a formal marketing process in May, which has reportedly attracted interest and is progressing well. As a result, Wood Group and Amec Foster Wheeler continue to expect the combination to complete in the fourth quarter of 2017.
Robin Watson, chief executive of Wood Group, said: “Both sets of shareholders overwhelmingly supported the proposed combination and we continue to believe that the proposed remedy will be sufficient to obtain clearance from the CMA. We remain fully committed to completing the transaction in quarter four this year.”
Jon Lewis, chief executive officer at Amec Foster Wheeler, said: “Since the announcement of the remedy offer in May, Amec Foster Wheeler has made good progress marketing its UK upstream oil and gas business to a range of potential buyers and is continuing the divestment process. We remain committed to closing the transaction in quarter four this year.”