The UK’s competition watchdog has approved the remedial plans for the merger of oil engineering firms Wood Group and Amec Foster Wheeler.
The combination is now expected to complete in October 2017, following receipt of merger clearance in Mexico.
The remedy consists of selling off of the majority of Amec Foster Wheeler’s UK upstream oil and gas business.
Robin Watson, chief executive of Wood Group said: “Since we announced the deal in March, both parties have maintained a relentless focus on keeping on schedule.
“Today’s earlier than anticipated decision from the CMA allows us to move forward with pace and we are very confident of completing the acquisition of Amec Foster Wheeler in October.”
Jon Lewis, chief executive cfficer of Amec Foster Wheeler added: “We welcome today’s announcement from the CMA. We have made significant progress marketing Amec Foster Wheeler’s UK upstream oil and gas business to a range of high quality bidders, which has helped to ensure that we will close the transaction in October, bringing the many benefits of the combined company to our clients, colleagues and shareholders.”
The Competition and Markets Authority (CMA) began investigating the merger of the two companies in June 2017.
Both provide engineering services to the Upstream Offshore oil and gas sector in the UK Continental Shelf.
After the CMA found that competition concerns could arise in the supply of engineering and construction services and operation and maintenance services, the companies offered to sell Amec Foster Wheeler’s businesses in these areas to address the CMA’s concerns.
The CMA found that this proposal would, in principle, be suitable to address its competition concerns and opened a public consultation in August.
Following this, the CMA is now satisfied the issues it identified will be fully addressed by the remedy offered.
The CMA has therefore decided that the merger will not be referred for an in-depth, phase two, 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 have therefore conducted a thorough investigation into this merger, and believe that the sale of Amec Foster Wheeler’s assets will address our concerns and ensure that customers in the North Sea continue to be able to obtain competitive bids.
“The CMA is committed to conducting merger investigations as quickly and efficiently as possible. In this case, the CMA worked with the companies on a ‘twin-track’ approach, engaging with them on shaping remedies that might mitigate competition concerns, if any were found, whilst still investigating whether such concerns arose.
“This enabled us to promptly reach a final view on the proposed remedy after competition concerns were identified, helping to reduce uncertainty about the potential impact of the merger for customers within this industry.”
Amec Foster Wheeler’s relevant assets will now be sold to a purchaser approved by the CMA.