Amec Foster Wheeler secures contract of Brunei Shell Petroleum

Oil rig services

John Pearson, Amec Foster Wheeler's president for Oil, Gas & Chemicals, said: "These award reflects our expertise, as well as our successful track record in large, complex Feeds, and project management".

"The Board believes that a combination with Wood adds to the standalone prospects of the Company, by accelerating the delivery of the future value inherent in the Amec Foster Wheeler business and, at the same time, helps to realise the full potential of each of Amec Foster Wheeler and Wood", the company said.

Shares for both companies received a boost after the deal was disclosed, with AMEC and Wood seeing a 14.7 and 4.4 increase, respectively.

Wood Group's shares also rose, up 6.8% to 804p. The parties noted that in valuing Amec at 564p per share Wood Group offered a premium of nearly 29 per cent on 453p - the average share price across the month to March 10.

The cost savings are likely to impact administrative jobs across the combined group. AMEC FW has announced the suspension of a planned stock offer to raise £500m.

Hot on the heels of the takeover, Amec again showed its pulling power by revealing a new £125m contract to provide long-term support to EDF Energy Nuclear Generation - a deal that could generate annual revenues of up to £30m. Ian Marchant will remain as chairman of the combined company.

AMFW shares continued to top the FTSE 250 leader board in late morning trading, up over 14.5%, or 71.8p at 561.0p, while Wood Group shares were up nearly 4.5%, or 33.5p at 785.5p.

A company statement said: "The company has received a high level of interest and expects indicative bids later this month". Extending the scale and scopeIan Marchant, Wood Group chairman, 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".

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