Scottish energy services giant Wood has secured its place in the pantheon of leading UK blue-chip companies after completing the £2.2 billion takeover of Amec Foster Wheeler (AFW).
Group CEO Robin Watson said he was pleased to get the deal, first revealed in March, over the line.
The enlarged company has a market value of around £5bn. It will trade as Wood and continue to be headquartered in Aberdeen.
Mr Watson yesterday pledged there will be no job losses in the north east as a result of the cost savings expected from the coming together of the two groups.
He said the deal secured Wood in the FTSE 100 index of the UK’s biggest companies, and showed there is “life outside London”.
“We’ve been in the FTSE 100 before with Wood Group, but we’ve been on the fringes of it,” Mr Watson said.
“This deal really does firmly establish us there.
“There is life outside London. I think that’s an important point for everyone to recognise. There’s nothing against London, but there’s a heat in London that doesn’t always manifest itself across the rest of the UK.
“Aberdeen is our spiritual home from a Wood perspective. It’s where we’ve been formed as a company.
“We should acknowledge Sir Ian Wood and everything he did in establishing Wood Group as a fantastic organisation.
“We need to recognise that this is a new company, so there is a feeling of newness to us.”
Mr Watson said the plan is to seek growth opportunities for Wood, and the acquisition of AFW could help combat the “brain drain” the region has battled since oil prices took a dive three years ago.
“By establishing a business of this shape and scale in Aberdeen, which is in the FTSE 100, there are now very senior positions in the north-east,” he said.
The deal originally faced hurdles over competition issues related to the respective North Sea operations of the two firms.
However, AFW yesterday confirmed it had concluded the £228 million sale of its UK North Sea operations to Worley Parsons Europe Ltd.
The deal was the final piece of the jigsaw required to allow the Wood combination to go through.
The newly created Wood is expected to generate annual revenues totalling more than £11bn and will employ 55,000 people across 60 countries.
Wood Group was founded in 1982 by Sir Ian Wood after he separated it from his family fishing business.
Since 2014 Wood Group has gone from 40% of its business depending on the North Sea to 15%-17% being focused on the UK Continental Shelf.
The AFW deal will see the business shift further to 50% oil focused, as it gains nuclear, mining, power and processing capabilities.
Mr Watson said the North Sea still had a useful lifespan before decommissioning began in earnest.
He said: “I’m not in a rush for decommissioning, to be perfectly honest.
“But the good thing with the UK now is when you look at the 20 billion barrels remaining, and look at the prospects, they are actually quite well defined.”
“There is a five-to-10-year window where we need to unlock this, because if you don’t you just inevitably accelerate decommissioning.”
business@thecourier.co.uk
