Amec offers to sell assets amid competition concerns over Wood Group takeover
Amec Foster Wheeler has offered to sell off a number of assets as part of attempts to allay competition concerns over its proposed £2.2 billion takeover by Wood Group.
The Competition and Markets Authority (CMA) warned earlier this month that the deal could face an in-depth probe if the companies fail to address antitrust issues.
The UK watchdog believes that the deal as it currently stands gives rise to competition concerns, particularly surrounding the supply of engineering and construction services, as well as operation and maintenance services in the North Sea.
On Tuesday the CMA said it is considering proposals put forward by the duo which would see Amec Foster Wheeler sell off "almost all" assets which contribute to these services in its upstream offshore oil and gas business in the UK.
The watchdog added that there are "reasonable grounds" for believing these undertakings, or a modified version of them, might be acceptable and it will open a public consultation on the proposal.
Kate Collyer, deputy chief economic adviser and decision-maker in the case, said: "It is crucial that competition is maintained in this major UK industry. We will consider the undertakings offered by Wood Group and Amec Foster Wheeler further, and carefully consult interested parties, in order to make sure that they fully address our concerns."
If the CMA does not accept the undertakings proposed, the deal will be referred for an in-depth investigation.
When announcing the deal in March, Aberdeen-based Wood Group said it will result in "significant cost and revenue synergies" of at least £110 million a year.
Wood Group employs 29,000 people while Amec has 35,000 workers and the new entity would be valued at around £5 billion.