Amec offers £1.9bn for Foster Wheeler

The oil and gas engineer says buying its Swiss rival would mean 'double digit' growth.

by Rachel Savage
Last Updated: 13 Jan 2014

Amec, the UK’s second-largest oil and gas engineering company, has offered to buy its Swiss rival Foster Wheeler for $3.2bn (£1.9bn), a deal it said would create ‘double-digit’ earnings growth in the first year.
 
Foster Wheeler shareholders will receive 0.9 Amec shares and $16 cash for every share they own, valuing the company at $32 a share. Together, the companies would be worth £5bn.
 
Amec said the deal would more than double its sales in emerging markets, partly due to increased business in Latin America.
 
Chief exec Samir Brikho called the takeover ‘transformational’, and said it was a ‘compelling proposition for our shareholders, customers and employees'. Amec’s shareholders have still got to approve the deal, so he’ll be hoping they’re suitably compelled.
 
Amec said existing funds and new debt financing would fund the $1.6bn cash part of the tie-up. The company said it plans to list in the US once the deal is completed. Foster Wheeler are listed on the Nasdaq, although it is registered in Switzerland and its executives are based in Reading.
 
Amec’s offer for Foster Wheeler comes after the company pulled out of an attempt to buy FTSE-250 engineers Kentz in September, after a £700m offer was rejected. The new deal is decidedly more juicy, and Amec shareholders seemed quietly satisfied – shares were up almost 2% at 1pm.

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