UK oil services firms agree £5 billion merger deal

UK oil services firms agree £5 billion merger deal

UK oil services company John Wood Group has announced a takeover deal has been agreed with Amec Foster Wheeler, a £5 billion deal that merges two of the UK’s largest energy firms.

FTSE 250-listed Amec’s share price jumped 18% to £5.76 in the aftermath of the deal, while John Wood’s increased by 8% to £8.10.

The merger deal will involve four Amec board members joining the board of the combined group, while Wood Group’s existing chief executive, chief financial officer and chairman will remain in the posts.

Under the terms of the deal, Amec has been valued at around £2.2 billion, while its shareholders will own around 44% of the combined company.

“The combination will create an asset-light, largely reimbursable business of greater scale and enhanced capability, diversified across the oil and gas, chemicals, renewables, environment and infrastructure and mining segments,” said Wood Group chairman Ian Marchant.

Analyst Philip Barker added: “This is a significant transaction which comes at a time of continued oil price volatility and will bring together two of the UK’s largest energy services companies to create one of the biggest oil services companies in Europe.”