Wood Group Expects Amec Deal to Close in 2H 2017
Oil services company Wood Group has confirmed that its acquisition of rival Amec Foster Wheeler is expected to close in the second half of this year.
In the first quarter of 2017, Wood Group announced that it had agreed to buy Amec Foster Wheeler for $2.7 billion (GBP 2.2 billion pounds). Wood Group initially said it expected annual cost savings to reach at least GBP 110 million, while one-off costs would be around GBP 190 million.
On April 5, cost savings figures were expected to stretch further, increasing by 36 percent to at least GBP 150 million by the end of the third year following completion, Wood Group revealed.
Savings are said to include ‘corporate and administrative efficiencies’, suggesting job cuts in places where there is overlap.
“The oil and gas market has continued to present challenges and, as expected, year to date performance is down on 2016,” Wood Group said in a company statement.
“Overall, year to date performance has been weaker than anticipated. However, recent awards and renewals demonstrate good customer support and we are seeing the enduring benefit of structural cost reductions achieved in 2016,” the statement added.
Wood Group anticipates stronger performance in the second half of the year.
Analysts are forecasting higher revenues in 2018, compared to 2017, along with higher profits.
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