Britain’s market regulator said on Aug. 2 a takeover of Amec Foster Wheeler by oilfield services firm Wood Group could hurt competition.
Wood Group agreed to buy smaller rival Amec Foster Wheeler for £2.2 billion (US$2.7 billion) in March.
Britain's Competition and Markets Authority (CMA) said that the merger could lead to competition concerns in the supply of engineering and construction services as well as operation and maintenance services on the UKCS.
Wood Group has until Aug. 9 to formalize its proposals for addressing concerns about the deal or it will be referred for an in-depth probe, the CMA said.
Wood Group said that when the deal was explained that it had proposed to the CMA a divestment of a majority of Amec Foster Wheeler's upstream oil and gas assets and operations in the U.K.
Wood Group said on Aug. 2 that it would formally submit the proposal to the CMA and both companies believe that this would be sufficient to address CMA's competition concerns and obtain clearance for the merger.
However, the undertakings excluded Amec's Aberdeen-based services unit Qedi. The assets identified in the undertakings generated £42 million (US$55.5 million) in core earnings on revenue of about £740 million (US$978.6 million) in 2016.
Separately, the U.K.'s Serious Fraud Office said in July it had launched a bribery investigation of Amec.
Shares in Wood Group were down 0.57% and Amec Foster was off 0.75% as of 7:42 CDT, Aug. 2.
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