The UK’s Competition and Markets Authority (CMA) said on Tuesday it is “considering proposals” to overcome its competition concerns about Aberdeen-based oil and gas services giant Wood Group’s roughly £2.2 billion purchase of rival Amec Foster Wheeler.
“The companies provide engineering services to the UK’s Upstream Offshore oil and gas sector in the UK continental shelf,” said the CMA.
“The Competition and Markets Authority conducted an investigation into the merger and found competition concerns in the supply of engineering and construction services and operation and maintenance services in the UK.
“In order to address the CMA’s competition concerns the companies have offered to sell off almost all of Amec Foster Wheeler’s assets which contribute to these services in its Upstream Offshore oil and gas business in the UK.
“The CMA considers there are reasonable grounds for believing that these undertakings, or a modified version of them, might be acceptable and it will open a public consultation on the offer in due course.”
The CMA said if it does not accept the undertakings proposed, the merger will be referred for an in-depth investigation.
Kate Collyer, Deputy Chief Economic Adviser and decision maker in this 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.”
The CMA has until October 12, 2017, to consider whether to accept the offer from the companies with the possibility of extending the deadline until December 7, 2017, “in special circumstances.”
Wood Group CEO Robin Watson said: “Today’s announcement is an important milestone and gives us further confidence in our ability to complete the transaction in quarter four this year.”
Amec Foster Wheeler CEO Jon Lewis said: “We welcome the announcement by the CMA.
“Our offer of a proposed remedy in May and the early commencement of the sale process to potential buyers of the upstream oil and gas business has ensured we have navigated this process ahead of schedule increasing the likelihood that the transaction with Wood Group will close in quarter four this year.”