Engineer says deal will give it greater flexibility in offshore energy sector

Wood Group is pressing ahead with a buyout of Amec Foster Wheeler, confirming it hopes to tie up an agreement by the end of the year.

Amec is one of Darlington’s largest employers and Wood Group says any acquisition will give it greater flexibility in the offshore energy sector.

However, fears have been raised over possible cuts to Amec’s workforce, which includes back office staff in payroll operations, after Wood Group admitted it will make operational and administrative changes and the Echo is aware of claims that some Amec staff have already been released.

But bosses insist no final decisions have yet been made on personnel, instead saying the company is focused on getting necessary approvals.

A spokeswoman said: “We remain genuinely excited by the opportunities this deal will create for our business, our capabilities, our innovations and our future.

“We are limited in terms of the level of detail we can provide but the next steps are that shareholders will vote in June on their approval of the deal going ahead. If both companies’ shareholders approve the deal then we can begin the planning of the integration process.

“However, this is subject to several countries’ regulatory authorities and antitrust authorities to approve the deal in terms of the markets where we both compete.”

Wood Group previously confirmed it believes its plan will save at least £150m annually by the end of the third year following completion.

A third of the changes are expected to come from office closures and cuts to duplicate IT and support services.

Bosses say their figures take into account Amec’s finance and HR operations shifting to Wood Group, which is known for managing operations at the Central Area Transmission System gas terminal, in Seal Sands.

According to latest results, released last month, Amec Foster Wheeler’s annual pre-tax deficit ballooned to £542m, with the prolonged oil and gas sector downturn negating gains in power and environmental work.

However, chief executive Jon Lewis said Amec, which has taken the decision to suspend dividend payments until “sustainable free cash flow” generation, is primed to make “significant progress”

in 2017.