Wood Group confident of Amec takeover after CMA review
Updated : 08:24
John Wood Group's takeover of Amec Foster Wheeler took a step further after the competition regulator provisionally accepted the pair's proposed remedies.
In order to allay the Competition and Markets Authority's concerns over the reduced competition in the supply of engineering and construction services and operation and maintenance services in the UK, Wood has offered to sell off almost all of Amec’s assets that contribute these services in its UK upstream offshore oil and gas business.
The CMA said it "considers there are reasonable grounds for believing that these undertakings, or a modified version of them, might be acceptable".
Wood and Amec expect the deal to be sealed in the fourth quarter of 2017, as the CMA said its provisional decision does not require the parties to complete the sale of the remedy business in advance of completing the merger.
But the CMA will still undertake a public consultation and if it does not accept the undertakings proposed, the merger will be referred for an in-depth investigation.
Kate Collyer, the authority's deputy chief economic adviser and decision maker in this case, said: "It is crucial that competition is maintained in this major UK industry. We will consider the undertakings offered by Wood Group and Amec Foster Wheeler further, and carefully consult interested parties, in order to make sure that they fully address our concerns."
Robin Watson, Chief Executive of Wood Group said “Today’s announcement is an important milestone and gives us further confidence in our ability to complete the transaction in quarter four this year.”
Commenting on today’s announcement, Jon Lewis, Chief Executive Officer at Amec Foster Wheeler said "We welcome the announcement by the CMA. Our offer of a proposed remedy in May and the early commencement of the sale process to potential buyers of the upstream oil and gas business has ensured we have navigated this process ahead of schedule increasing the likelihood that the transaction with Wood Group will close in quarter four this year."