Oil and gas firm Amec announces bid for US rival
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Engineer and project manager Amec is set to buy America's Foster Wheeler in a £1.9bn deal combining two big players in the UK's oil and gas sector.
Amec, which has a base at Great Yarmouth, said it has provisionally agreed the terms of a cash and shares deal to buy Foster Wheeler for 3.2 billion US dollars (£1.9bn). The combination would create a new company valued at £5bn.
The two firms already work together after recently securing consultancy contracts in Kuwait for the building of a new refinery.
Amec said the tie-up with Foster Wheeler would more than double its revenues from growth regions, including through a boost in its Latin America exposure.
It will also extend its capabilities in oil and gas from exploration and production to the downstream sector, as well as bring in new customer relationships.
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Chief executive Samir Brikho said the potential combination was 'financially and strategically attractive'.
He added: 'I believe it would be a compelling proposition for our shareholders, customers and employees.'
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The making of a firm offer is subject to a number of pre-conditions, including completion of due diligence by both parties.
The move is the latest attempt by Amec to bolster its scale, having recently failed with a £700m takeover approach for Kentz, which works on oil and gas services projects across the globe.
Foster Wheeler was formed in 1927 from a merger of two companies based in the United States - the Power Specialty Company and the Wheeler Condenser & Engineering Company, whose roots go back to 1891.