Update: Wood/Amec FW Merger Cleared by UK, Mexico
Update: Wood Group has received its final regulatory approval from Mexico.
"Following approval by the Mexican anti-trust commission, Wood Group considers that all of the regulatory and third party clearance conditions ...have now been satisfied," it said September 15, adding that its merger with AmecFW is expected to complete on or around October 6.
NGW's original September 13 story follows.
The UK’s competition regulator has lifted objections to a merger of two UK-based global contractors which now is due to complete next month.
The Competition and Markets Authority (CMA) on August 2 raised concerns over Wood Group’s planned all-share takeover of Amec Foster Wheeler (AmecFW), following an investigation of the two firms since June.
However the CMA said September 12 it had accepted proposals to resolve competition concerns offered by the two companies. Wood Group said the merger is now expected to complete in October 2017, once approved by Mexico.
CMA said that -- after it found that competition concerns could arise in the supply of engineering & construction services and operation & maintenance services in the UK offshore upstream sector -- the companies offered to sell Amec FW’s businesses in these areas to address the CMA’s concerns.
Wood Group said that no sale is required of AmecFW’s commissioning business, qedi, and also noted that the CMA does not require the parties to complete the divestments prior to completing the merger.
Wood Group CEO Robin Watson said September 12: “Today’s earlier than anticipated decision from the CMA allows us to move forward with pace and we are very confident of completing the acquisition of Amec Foster Wheeler in October.” The company added that its formal offer to CMA was made August 9 and accepted in principle by CMA on August 15.
Announcing first-half results August 22, by which point Wood Group was assuming the remedies would be accepted, it said that the merger would deliver significant cost synergies of at least $170mn by the third year.