Amec in €2.3 billion offer for Foster Wheeler

UK-headquartered contractor Amec has made an offer to acquire contractor Foster Wheeler, which also has its operational base in the UK, for £1.9 billion (€2.3 billion).

The deal would see Foster Wheeler shareholders receive cash and shares worth US$32 (€23.4) for each Foster Wheeler share they sell. If the offer is accepted, Foster Wheeler shareholders would own 23% of the combined companies.

Amec chief executive Samir Brikho said, "The combination of our two businesses would be financially and strategically attractive. As well as positioning us across the whole oil and gas value chain and providing scale in our growth regions, we would expect double-digit earnings enhancement in the first twelve months. I believe it would be a compelling proposition for our shareholders, customers and employees."

The acquisition would also produce annual cost synergies of US$75 million (€55 million), Amec said, on top of “significant tax and revenue synergies”.

Amec reported 2012 revenues of £4.16 billion (€5 billion), while Foster Wheeler reported 2012 revenues of US$3.41 billion (€2.5 billion).

The board of Foster Wheeler is considering the offer, which is also subject to shareholder approval, and has agreed not to solicit alternative proposals until 22 February.