Competition regulator flags up £2.2bn Amec Foster Wheeler sale

The UK competition regulator has flagged that the proposed £2.2bn acquisition of Cheshire-based Amec Foster Wheeler by Wood Group would give rise to competition concerns.

The Competition and Markets Authority (CMA) said that the deal for the oil services company to be taken over by its larger rival would give it concerns over the supply of engineering and construction services and operation and maintenance services on the UK continental shelf.

In response, Aberdeen-headquartered Wood Group said that it had already given the regulator a proposed remedy, which would be to sell Amec’s North Sea business, and that it would now formally submit the proposal to the CMA to obtain clearance.

Amec Foster Wheeler started marketing those elements of the business in May and said discussions are going well.

Jon Lewis, chief executive at Amec Foster Wheeler, said: “Since the announcement of the remedy offer in May, Amec Foster Wheeler has made good progress marketing its UK upstream oil and gas business to a range of potential buyers and is continuing the divestment process. We remain committed to closing the transaction in quarter four this year.”

Robin Watson, chief executive of Wood Group, said: “Both sets of shareholders overwhelmingly supported the proposed combination and we continue to believe that the proposed remedy will be sufficient to obtain clearance from the CMA. We remain fully committed to completing the transaction in quarter four this year.”

The CMA will provisionally decide whether this remedy proposal is sufficient by August 16, with a final decision by October 11.