CMA mulls competition remedy offered up for Wood Group's £2.2bn takeover of Amec Foster Wheeler

 
Rebecca Smith
The firms are hopeful of the takeover going through in the fourth quarter
The firms are hopeful of the takeover going through in the fourth quarter

The competition watchdog will undertake a public consultation as it mulls proposals to soothe competition concerns in Wood Group's £2.2bn takeover of Amec Foster Wheeler.

In June, shareholders of the two oil services firms gave their approval to the proposed merger, which was agreed back in March, and it is expected to complete in the fourth quarter of this year.

Read more: Shares in Wood Group fall on SFO probe of Amec Foster Wheeler

However, the Competition and Markets Authority (CMA) had raised concerns over the planned takeover, and instructed the firms to provide a proposed remedy or face an in-depth investigation, after finding competition concerns in the supply of engineering and construction services, and operation and maintenance services in the UK.

In response to this, the firms offered to sell off nearly 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 said there were "reasonable grounds" for believing this move "might be acceptable", and said today it intends to open a public consultation on the offer in due course.

If the CMA does not accept the proposal, the merger will be referred for an in-depth investigation.

Kate Collyer, deputy chief economic adviser at the CMA 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 12 October to consider whether to accept the companies' proposal, with the possibility of extending the deadline until 7 December in special circumstances.

Read more: Watchdog: Wood Group's takeover of Amec will reduce competition

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