Energy services outfit Wood Group has reached an agreement to acquire engineering and project management company Amec Foster Wheeler for about £2.225bn.

Amec Foster Wheeler shareholders will own about 44% of the combined entity, which is likely to achieve cost synergies of £110m a year, Wood Group said.

Under the terms of the deal, the value of Amec Foster Wheeler shares was put at £5.64 per share, a 15.3% premium on the closing price on 10 March.

Wood Group chief executive Robin Watson and chief financial officer David Kemp will remain CEO and CFO of the new company.

Four members of the Amec Foster Wheeler Board will join the board of the combined company. 

Wood Group chairman Ian Marchant 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.

“The combination will create an asset-light, largely reimbursable business of greater scale and enhanced capability, diversified across the oil and gas, chemicals, renewables, environment and infrastructure and mining segments.”

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