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| Wood Group agrees takeover of rival Amec Foster Wheeler | Wood Group agrees takeover of rival Amec Foster Wheeler |
| (35 minutes later) | |
| Amec Foster Wheeler has agreed to a £2.2bn takeover by Wood Group in a deal that brings together two of the UK's largest energy services companies. | Amec Foster Wheeler has agreed to a £2.2bn takeover by Wood Group in a deal that brings together two of the UK's largest energy services companies. |
| Wood Group hopes to cut £110m in costs from the combined business, which will provide services to the oil and gas, chemicals and mining sectors. | Wood Group hopes to cut £110m in costs from the combined business, which will provide services to the oil and gas, chemicals and mining sectors. |
| The deal will create a company with a combined value of about £5bn. | The deal will create a company with a combined value of about £5bn. |
| Shares in Amec soared 14.7% to 561p, while Aberdeen-based Wood Group's shares climbed 4.4% to 785p. | |
| Wood Group is offering 564p a share for its British rival. | Wood Group is offering 564p a share for its British rival. |
| Mark Wilson, an analyst at Jefferies, said: "While materially above our Amec valuation, we can see Wood Group consolidating its market-leading UK North Sea business, expanding product lines in the US and possibly increasing the scope for asset sales." | |
| The deal has emerged at a difficult time for both businesses amid continued oil price volatility. | The deal has emerged at a difficult time for both businesses amid continued oil price volatility. |
| Amec was due to raise £500m through a rights issue next week, although this has now been suspended. | Amec was due to raise £500m through a rights issue next week, although this has now been suspended. |
| The funds were due to be used to reduce its £1bn debt pile and for a reorganisation of the company. It was formed by the merger of Amec and American firm Foster Wheeler three years ago. | The funds were due to be used to reduce its £1bn debt pile and for a reorganisation of the company. It was formed by the merger of Amec and American firm Foster Wheeler three years ago. |
| Amec also announced on Monday that last year's revenues fell 8% to £5.4bn after "continuing weakness" in the oil and gas market offset strong performances elsewhere in its business. That weakness was also partly responsible for a £56m slide in profit to £318m. | Amec also announced on Monday that last year's revenues fell 8% to £5.4bn after "continuing weakness" in the oil and gas market offset strong performances elsewhere in its business. That weakness was also partly responsible for a £56m slide in profit to £318m. |
| In February, Wood Group revealed a revenues had fallen 16% last year to $4.9bn, while pre-tax profit halved to $66m. | In February, Wood Group revealed a revenues had fallen 16% last year to $4.9bn, while pre-tax profit halved to $66m. |
| The company has been shedding staff and last year it cut about 18% of its employees. | The company has been shedding staff and last year it cut about 18% of its employees. |
| Under the terms of the deal, Amec shareholders will end up with 44% of the larger group. | Under the terms of the deal, Amec shareholders will end up with 44% of the larger group. |
| The management of Wood Group - chief executive Robin Watson, finance chief David Kemp and chairman Ian Marchant - will continue in their roles following completion of the deal. | The management of Wood Group - chief executive Robin Watson, finance chief David Kemp and chairman Ian Marchant - will continue in their roles following completion of the deal. |
| Wood Group chairman Ian Marchant said: "The combination extends the scale and scope of our services, deepens our existing customer relationships, facilitates further development of our technology-enabled solutions and broadens our end market, geographic and customer exposure. | Wood Group chairman Ian Marchant said: "The combination extends the scale and scope of our services, deepens our existing customer relationships, facilitates further development of our technology-enabled solutions and broadens our end market, geographic and customer exposure. |
| "Delivering significant sustainable synergies will also result in a leaner and more competitive combined group, creating value for shareholders." | "Delivering significant sustainable synergies will also result in a leaner and more competitive combined group, creating value for shareholders." |