Amec Foster Wheeler Explained

Amec Foster Wheeler plc
Type:Defunct
Fate:Acquired by Wood Group
Foundation: (by merger of AMEC plc and Foster Wheeler AG)
Location:London, United Kingdom
Industry:Engineering and project management
Revenue:£5,440 million (2016)
Operating Income:£300 million (2016)
Net Income:£-514 million (2016)
Num Employees:36,000 (2017)

Amec Foster Wheeler plc was a British multinational consultancy, engineering and project management company headquartered in London, United Kingdom. In October 2017, it was acquired by Wood Group.[1] [2]

It was focused on the Oil, Gas & Chemicals, Mining, Power & Process and Environment & Infrastructure markets, with offices in over 55 countries worldwide. Roughly a third of its turnover came from Europe, half from North America and 12% from the rest of the world.

Amec Foster Wheeler shares were publicly traded on the London Stock Exchange and its American Depositary Shares were traded on the New York Stock Exchange.[3]

History

Amalgamated Mechanical Engineering and Construction (AMEC) was formed from the 1982 amalgamation of Leonard Fairclough & Son (founded 1883) and the William Press Group (founded 1913). During 1988, AMEC went on to acquire Matthew Hall Group.[4] [5]

During the mid 1990s, the Norwegian engineering company Kvaerner negotiated with AMEC's board towards a potential acquisition of the latter; after talks broke down, the firm resorted to a hostile takeover bid.[6] [7] Kvaerner quickly purchased a 26% stake in the firm and presented AMEC's other shareholders with a single offer of £361 million for the outstanding shares.[8] [9] Around the same timeframe, AMEC made its own bid to merge with rival British construction firm Alfred McAlpine; however, the latter's board voted against the move.[10] [11]

In 1996, AMEC took a 40% stake in Spie Batignolles from Schneider in association with a management buyout. Amec launched the AMEC SPIE brand for engineering services in Europe, a rail construction business AMEC Spie Rail was created, and the remaining construction business was retained as Spie Batignolles.[12] The company announced that it would seek to sell the construction arm of the business Spie Batignolles, and entered negotiations to secure a management buyout of that division;[12] the management buyout of the construction arm of Spie was completed in September 2003 with the aid of Barclays Private Equity Finance,[13] and later that year Amec took full control of the remaining parts of Spie.

The company continued making numerous acquisitions during the new millennium. These included Ogden Environmental & Energy Services[14] and AGRA Monenco Inc., a North American engineering and services company, both in 2000[15] as well as the US operations and equipment of Lauren Kamtech in 2003.[16] Then, in 2004, AMEC, as part of a joint venture with Fluor Corporation, was awarded a multi-year contract to assist in the reconstruction of Iraqi infrastructure following the 2003 invasion of Iraq;[17] [18] while lucrative in the long run, the arrangement initially yielded little profit as well as being a slow revenue stream.[19] [20] AMEC continued to be involved in Iraq into the late 2010s.[21] [22]

During 2005, AMEC acquired UK-based NNC, a large nuclear consulting company and its subsidiaries, including Ontario-based Nuclear Safety Solutions ('NSS'), the nuclear safety division of OPG, which was spun off when OPG was privatised.[23] The European engineering business, AMEC SPIE, was sold to PAI Partners for €1,040 million in 2006 and the European rail business joint venture Amec Spie Rail systems was sold for an estimated £200million in 2007, to Colas Group.

In 2007, AMEC purchased UK environmental consultancy Applied Environmental Research Centre (AERC),[24] providers of environmental science, planning engineering and monitoring services, and sold its UK construction arm to Morgan Sindall.[25] [26] During 2008, it sold its internal plant hire division to Speedy Hire[27] before buying project services company Rider Hunt International,[28] North American environmental consulting firm Geomatrix Consultants, Inc., and Slovakian nuclear services company AllDeco.[29] In 2009, AMEC acquired Performance Improvement Group, Journeaux, Bedard & Associates and GRD Limited[30] and in 2010, it continued to expand with the £61.2 m purchase of Entec UK, one of the UK's largest Environmental Consultancies.[31] GRD Ltd. was a Perth-based company incorporating three companies Global Renewables, GRD Minproc, and Kirfield.[32]

During 2011, the company acquired US-based BCI Engineers & Scientists, Inc.,[33] MACTEC, a US-based engineering consultancy company,[34] and Zektin Group, an Australian-based specialist engineering consultancy for the oil and gas and resources industries.[35] AMEC also purchased Australian-based businesses Currie and Brown (Australia)[36] and BurmanGriffiths; furthermore, it acquired a majority stake in S2V Consulting.[37]

In January 2014, AMEC provisionally agreed a £1.9bn takeover of its Swiss-based rival Foster Wheeler.[38] [39] AMEC completed its purchase of Foster Wheeler on 13 November 2014, marking the move by changed its name to AMEC Foster Wheeler.[40] [41]

During the summer of 2015, the company announced that it was responding to a decline in oil prices by reorientation towards brownfield sites and activities outside of the US.[42] In November of that year, it announced the raising of its cost cutting target to $180m by 2017 along with the reduction of its final dividend by a half compared to the previous year.[43] The large debts that had been incurred during Amec's acquisition of Foster Wheeler could not reasonably be serviced when the oil and gas sectors, key clients of Amec Foster Wheeler, reduced their spending as a reaction to a global downturn in revenues.[44] The resultant financial difficulties led to the company's chief executive Samir Brikho stepping down in January 2016.[45] [46]

In March 2017, Wood Group announced it would acquire the company for £2.2 billion.[47] [48] On 9 October 2017, following approval from the Competition and Markets Authority,[49] the transaction was completed.[1] [50] In the months following the transaction, John Wood Group opted to sell off some of the recently-acquired portions of Amec Foster Wheeler, including its North Sea oil & gas interests and its North American nuclear operation.[51] [52] Other moves included a rebranding exercise and several office closures.[53]

Operations

Amec Foster Wheeler employed over 40,000 people in more than 55 countries. The company had three geographic business units covering engineering and project delivery operations—Americas; Northern Europe & Commonwealth of Independent States; Asia, Middle East, Africa & Southern Europe—and one power equipment business unit operating worldwide - The Global Power Group.[54]

AMEC's operations were structured until October 2012 into Natural Resources, Power & Process and Environment & Infrastructure.[55]

AMEC's UK construction business was sold in 2007.[56] [57] Amongst its notable projects were: the Kielder Dam completed in 1982,[58] the Cumberland Infirmary completed in 2001,[59] the M6 Toll completed in 2003,[60] new offices for HM Revenue and Customs at Longbenton completed in 2005,[61] the Docklands Light Railway City Airport extension completed in 2005,[62] the University College London Hospital completed in 2005[63] and the New York Times Building completed in 2007.[64]

Charity

Amec Foster Wheeler supported children's charity SOS Children's Villages from 2007, funding educational projects in Asia. Amec Foster Wheeler also funded a green project in the Children's Village in Gwagwalada, Nigeria, enabling houses to become self-sufficient following the installation of solar power and water infrastructure.[65]

Corruption

On 1 July 2021, the Serious Fraud Office (SFO) entered into a Deferred Prosecution Agreement (DPA) with Amec Foster Wheeler Limited (AFWEL) relating to the use of corrupt agents in the oil and gas sector. The DPA, was approved by Lord Justice Edis, sitting at the Royal Courts of Justice. Under the terms of the DPA, AFWEL paid a financial penalty and costs amounting to £103m in the UK, which formed part of the US$177 million global settlement with UK, US and Brazilian authorities. The amounts paid by AFWEL in the UK include payment of the SFO’s costs of £3.4 million and payment of compensation to the people of Nigeria of £210,610.[66] [67]

Notes and References

  1. Wood Group completes acquisition of Amec Foster Wheeler . . 9 October 2017.
  2. News: Wood Group completes Amec Foster Wheeler acquisition, launches new brand, plans office closures . Olivia . Pulsinelli . . 11 October 2017.
  3. Web site: Foreign Corrupt Practices Act: Investigations Dataset . 2023-09-25 . fcpa.stanford.edu.
  4. Web site: Notes on Financial Times Actuaries Index 1988 . https://web.archive.org/web/20080227193731/http://www.actuaries.org.uk/files/pdf/library/TFA-041/0542-0553.pdf . 27 February 2008 .
  5. Web site: 14May92 UK: AMEC SCRAPS NAMES OF PRESS OFFSHORE AND MATTHEW HALL IN FAVOUR OF ITS OWN CORPORATE IMAGE . constructionnews.co.uk . 14 May 1992.
  6. Web site: Kvaerner acquires 12% stake in Amec . 24 November 1995 . Herald and Times.
  7. Web site: Kvaerner launches Amec bid . The Independent . Russell . Hotten . 28 November 1995.
  8. Web site: Kvaerner holds on to Amec stake . constructionnews.co.uk . 15 February 1996.
  9. Web site: Engineer rejects 100p-a-share bid before having its own offer turned down by McAlpine. Amec rebuffs Kvaerner move . 28 November 1995 . Herald and Times.
  10. Web site: Amec to seek new talks . The Independent . Russell . Hotten . 20 December 1995 .
  11. Web site: Defence as a form of attack . constructionnews.co.uk . 14 December 1995.
  12. (Google books)
  13. Web site: Spie Batignolles: History . fr . https://web.archive.org/web/20090222084833/http://www.spiebatignolles.fr/groupe/groupe_historique.aspx . 22 February 2009 . spiebatignolles.fr.
  14. News: Phoenix Business Journal . Amec buys Ogden Corp subsidiary . Bizjournals.com . 30 October 2000 . 18 April 2011.
  15. Web site: History – 2000 acquisition of AGRA . AMEC . https://web.archive.org/web/20080303005434/http://www.amec.com/about/aboutwide.asp?pageid=24 . 3 March 2008 .
  16. Web site: AMEC acquires Lauren Kamtech's U.S. operations to enhance project delivery in North America . Amec.com . 2 October 2003 . 18 April 2011.
  17. News: Terry . Macalister . Amec deal saves Government blushes in Iraq . The Guardian . UK . 25 March 2004 . 18 April 2011.
  18. Web site: AMEC wins leading role in rebuilding Iraq . power-eng.com . 24 February 2004.
  19. Web site: Amec profit from Iraq 'negligible' . constructionnews.co.uk . 9 September 2004.
  20. Web site: Amec's debt reduction is hit by slow Iraq payments . constructionnews.co.uk . 8 September 2005.
  21. Web site: AMEC dives on fears over Iraq . .standard.co.uk . 13 April 2012.
  22. Web site: Amec Foster Wheeler Wins BP Iraq Contract . hartenergy.com . 20 June 2016.
  23. Web site: June 2005 . Amec offers to buy NNC Holdings . https://archive.today/20060322143314/http://www.the-eic.com/News/Archive/2005/Jun/Article595.htm . 2006-03-22 . the-eic.com.
  24. Web site: Goldie . Anna . Amec buys Applied Environmental Research Centre . 19 November 2021 . Building . en.
  25. News: Morgan Sindall buys Amec's ailing construction business . . 4 June 2007.
  26. Web site: Amec inheritance drives Morgan Sindall into the red . 23 February 2016.
  27. News: Goodman . Eleanor . Speedy Hire buys Amec equipment hire arm . . 9 January 2008.
  28. Web site: AMEC acquires leading project services company Rider Hunt International . https://web.archive.org/web/20130219000753/http://www.amec.com/news/mediareleasedetails.asp?Pageid=876&MediaID=1277 . 19 February 2013 .
  29. Web site: Amec buys nuclear firm for £11.1m . Construction News . 22 July 2008 . 24 February 2013.
  30. Web site: Amec buys GRD . Builder & Engineer.
  31. Web site: Amec moves to buy Entec . Planning Resource . 2 April 2010.
  32. Web site: About us: History . grd.com.au . https://web.archive.org/web/20090914081855/http://www.grd.com.au/about-us/history . 14 September 2009.
  33. News: BCI Engineers and Scientists acquired by AMEC . . 2 February 2011.
  34. News: AMEC Closes MACTEC Acquisition - Quick Facts . RTTNews . 6 June 2011.
  35. News: AMEC Buys Australian Engineering Firm Zektin Group For US$48.4MM . . 4 March 2011.
  36. Web site: Harris . James . AMEC buys Currie & Brown . Mandadeals.co.uk . 18 April 2011 . https://web.archive.org/web/20111005204342/http://www.mandadeals.co.uk/m-and-a-news/1145348/amec-buys-currie-and-brown.thtml . 5 October 2011 . dead .
  37. Web site: AMEC Purchases Majority Shareholding in S2V Consulting . https://web.archive.org/web/20110715194232/http://realtimetraders.com/ArticleView.aspx?Id=1499265 . dead . 15 July 2011 . Realtimetraders.com . 18 April 2011 .
  38. News: Amec offers £1.9bn to buy Swiss rival Foster Wheeler . . 13 January 2014.
  39. News: AMEC ties up $3.3bn Foster Wheeler deal . Construction Week Online . 13 February 2014.
  40. News: Energy engineering giants merge, will base Americas unit in Houston . Olivia . Pulsinelli . . 13 November 2014.
  41. Web site: Amec slides as US target Foster Wheeler disappoints . The Guardian . Nick . Fletcher . 4 November 2014.
  42. News: Houston energy engineering firm changes focus to cope with oil slump . Suzanne . Edwards . . 24 June 2015.
  43. Web site: Amec Foster drops by a fifth after slashing dividend amid tough markets . The Guardian . Nick . Fletcher . 5 November 2015.
  44. News: Thomas . Nathalie . Ward . Andrew . Massoudi . Arash . Wood Group offer comes just in time for Amec Foster Wheeler . . 13 March 2017.
  45. Web site: Bow . Michael . Amec Foster Wheeler chief Samir Brikho exits as board loses faith . https://web.archive.org/web/20160122024706/http://www.independent.co.uk/news/business/news/amec-foster-wheeler-chief-ian-mchoul-exits-as-board-loses-faith-a6820386.html . 22 January 2016 . limited . live . . 19 January 2016.
  46. Web site: Lea . Robert . Chief who shot himself in the foot . . 13 March 2017.
  47. News: Wood Group agrees takeover of rival Amec Foster Wheeler . . 13 March 2017.
  48. Web site: Amec bought by firm 'it once looked at buying' . Ian . King . news.sky.com . 13 March 2017.
  49. Web site: John Wood Group / Amec Foster Wheeler merger inquiry . . 11 May 2017.
  50. Web site: Wood Group completes £2.2bn takeover of Amec Foster Wheeler . City AM . 9 October 2017 . 9 October 2017 . https://web.archive.org/web/20171009235319/http://www.cityam.com/273549/wood-group-completes-gbp22bn-takeover-amec-foster-wheeler . 9 October 2017 . dead.
  51. Web site: Wood divests Amec FW's North American nuclear business . environment-analyst.com . 9 November 2017 .
  52. Web site: Wood Group vows 'worst is behind us' after costly takeover . The Telegraph . Jillian . Ambrose . 20 March 2018.
  53. News: Wood Group completes Amec Foster Wheeler acquisition, launches new brand, plans office closures . Olivia . Pulsinelli . . 11 October 2017.
  54. Web site: Amec Foster Wheeler . amecfw.com . 5 March 2015.
  55. Web site: Amec Preliminary Results 2007 . https://web.archive.org/web/20080911230201/http://www.amec.com/uploadfiles/RNS_ANNOUNCEMENT_FINAL07.pdf . 11 September 2008 .
  56. Web site: Seawright . Stephen . Amec quits construction . The Telegraph . Telegraph Media Group Limited . 26 November 2018 . 13 December 2006.
  57. Web site: King . Ian . Amec bought by firm 'it once looked at buying' . Sky News . Sky UK . 26 November 2018 . 13 March 2017.
  58. Web site: Structure information . Sine.ncl.ac.uk . 26 March 2004 . 18 April 2011 . dead . https://web.archive.org/web/20110613015527/http://sine.ncl.ac.uk/view_structure_information.asp?struct_id=3544 . 13 June 2011 .
  59. Web site: Visit Cumbria . Visit Cumbria . 18 April 2011 . https://web.archive.org/web/20110521080830/http://visitcumbria.com/hospitals.htm . 21 May 2011 . live.
  60. Web site: Motorway Archive . Iht.org . 18 April 2011 . https://web.archive.org/web/20090623074741/http://www.iht.org/motorway/m6toll.htm . 23 June 2009 . dead .
  61. Web site: Public & Private buildings . Amec . https://web.archive.org/web/20061016171540/http://www.amec.com/sectors/sectors_2ndlevel.asp?PageID=253 . 16 October 2006 .
  62. Web site: Docklands Light Railway – London City Airport extension now open . Londoncityairport.com . 6 December 2005 . 18 April 2011 . https://web.archive.org/web/20061018121656/http://www.londoncityairport.com/index.php?mode=news&action=showStory&sId=936 . 18 October 2006 . dead .
  63. Web site: University College London Hospital wins award . uclh.nhs.uk . https://web.archive.org/web/20070124033221/http://www.uclh.nhs.uk/News/2002/May/ . 24 January 2007 .
  64. Web site: New York Times Project added to National OSHA Partnership with AMEC Americas . Osha.gov . 9 November 2005 . 18 April 2011 . https://web.archive.org/web/20111018070530/http://osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=11682 . 18 October 2011 . dead .
  65. Web site: Amec Foster Wheeler Partnership with SOS Children . 10 July 2015 . https://web.archive.org/web/20150711023557/http://www.soschildrensvillages.org.uk/get-involved/corporate-partnership/our-corporate-partners/amec-foster-wheeler . 11 July 2015 . dead .
  66. Web site: SFO enters into £103m DPA with Amec Foster Wheeler Energy Limited . . 2 July 2021.
  67. Web site: Policy paper: MOU between the UK and Nigeria concerning the application of the compensation amount derived from the deferred prosecution agreement between the Serious Fraud Office and AMEC Foster Wheeler Energy Limited (accessible version) . gov.uk . 21 February 2022.

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