SIGNS that Wood Group may be moving closer to completing a recommended £2.2 billion bid for its giant rival Amec Foster Wheeler could provoke mixed feelings for many people.
Shareholders in both groups have given strong backing to the deal. It forms a key element of Wood chief executive Robin Watson’s plan to diversify the firm to reduce its reliance on an oil and gas market which has been battered by the crude price plunge.
If the deal delivers what he expects Aberdeen will be home to a bigger and stronger business with leading positions in growing engineering markets around the world.
Amec Foster Wheeler had been planning to take radical action to strengthen its balance sheet until Wood pounced.
Sector watchers will recall that Amec said it had created a new force in global engineering after acquiring Foster Wheeler for £1.9bn in 2014 under former boss Samir Brikho, months before the oil price started tumbling.
Nothing has happened in recent weeks to ease the fears about the potential impact on jobs of the tie up between Wood and AFW that were expressed when it was announced in March.
Wood has said it expects to shed around 1,200 jobs from the enlarged business to achieve the synergies expected. Both firms have big offices in Aberdeen.
Conditions in the mature North Sea remain grim but AFW aims to sell the bulk of its business in the area to appease competition watchdogs. Potential buyers may expect to achieve big cost reductions at the operations to make the numbers add up.
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