13-02-2014
AMEC announces recommended offer for Foster Wheeler
AMEC, the international engineering and project management company, announces that it has entered into a definitive agreement with Foster Wheeler AG under which AMEC will make a recommended offer to acquire the entire issued and to be issued share capital of Foster Wheeler.
The terms of the Acquisition are as announced on 13 January 2014, with Foster Wheeler shareholders receiving 0.8998 new AMEC securities and $16.00 in cash for each Foster Wheeler share (representing approximately $3.3 billion, or £2.0 billion, in aggregate, payable approximately 50 per cent in cash and 50 per cent in AMEC securities). Individual Foster Wheeler shareholders will have the ability, through a mix and match facility, to elect the proportion of cash and securities to be received in the offer. This election will be subject to pro rata adjustment in the event either cash or securities is over-subscribed.
The cash portion of the consideration will be financed by a combination of AMEC's existing cash resources and new debt financing. The securities portion of the consideration will be satisfied by the issuance of approximately 90 million new AMEC securities to Foster Wheeler shareholders, which, at the election of Foster Wheeler shareholders, will be issued in the form of either ordinary shares or American Depositary Shares (for which AMEC will seek a US listing).
On completion of the Acquisition, Foster Wheeler shareholders will hold shares in AMEC representing approximately 23 per cent of its enlarged share capital and it is expected that two non-executive directors of Foster Wheeler will join the AMEC board.
The implementation agreement prohibits Foster Wheeler from soliciting competing proposals, and from providing information and engaging in discussions with third parties, except in limited circumstances.
Key anticipated benefits of the combination include:
· Positioning AMEC to serve across the whole oil and gas value chain, adding mid and downstream capabilities to AMEC's existing upstream focus and bringing new customer relationships
· Improved geographic footprint, more than doubling AMEC's current revenues in the Growth Regions, increasing AMEC's Latin America exposure and bringing scale benefits
· Annual cost synergies, estimated by AMEC to be at least $75 million, and additional significant tax synergies
· Significant revenue synergies, including cross-selling services to the combined customer base, such as expanding the brownfield and environmental service offering internationally into the mid and downstream markets
· Retaining AMEC's low-risk and cash generative business model. Foster Wheeler has a similar business model, with predominantly cost-plus contracting and an asset-light engineering and project management business
· Combining two highly skilled workforces with industry-leading engineering and project management expertise
· Adding a robust and profitable power equipment business with a solid backlog of orders.
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