The mega-deal reduces Wood Group’s exposure to volatile upstream oil and gas industry services to around 55% of revenue, while opening the opportunity to develop Amec’s environmental and infrastructure services business.
The deal was cleared by the Competition Markets Authority after Foster Wheeler Energy agreed to sell its North Sea engineering, construction and maintenance services business for in its upstream offshore oil and gas clients.
The Amec name – established in 1982 following the merger of Fairclough Construction and William Press in 1982 – will disappear in the Newly-branded Wood plc business.
Wood Group employs 29,000 people while Amec has 35,000 workers and the new entity would be valued at around £5bn.
Robin Watson, chief executive of Wood Group, said on Monday: “This transformational acquisition creates a global leader in the delivery of project, engineering and technical services to energy and industrial markets.
“We expect to deliver significant cost synergies and incremental revenue synergies in a less cyclical business which retains a predominantly reimbursable, asset light model with a balanced risk appetite.”
Aberdeen-based Wood Group said it will result in “significant cost and revenue synergies” of at least £110m a year.