Foster Wheeler Inks Definitive Deal With AMEC

Foster Wheeler said that it has entered into a definitive agreement with AMEC pursuant to which AMEC will make an offer to acquire all the issued and to be issued share capital of the company.

Under the terms of the offer, AMEC will offer to exchange for each outstanding share of Foster Wheeler common stock transaction consideration consisting of 0.8998 shares of AMEC stock and $16.00 in cash.

Separately, Foster Wheeler expects to pay a one-time dividend of $0.40 per share prior to, and not conditional on, the closing of the offer. The Company expects that there will be no Swiss withholding taxes on the dividend.

Today’s announcement follows the January 13 announcement of a provisional agreement between the companies.

Based on AMEC’s stock price of £10.92 per share (the close of trading on February 12, 2014) and an exchange rate of £/$1.658, the proposed transaction would value each Foster Wheeler share at approximately $32.69 and the fully diluted share capital of Foster Wheeler at approximately $3.3 billion (taking into account the proposed $0.40 dividend by the company). This represents a premium of approximately 13.8% to $28.73, the company’s closing stock price on November 26, 2013, the trading day prior to initial public reports about a potential business combination involving the company and AMEC, and a premium of approximately 20.4% to the 3-month volume weighted average price (measured for the three-months ending on November 26, 2013) of approximately $27.15.

Kent Masters, President and Chief Executive Officer of Foster Wheeler, said, “Both companies have strategies that are highly focused on growth, and our combination will help deliver on Foster Wheeler’s key strategic objectives: establishing material positions in upstream and minerals and metals, building positions in growth geographies and extending our services offering.” Specifically, the combination is expected to result in a company with:

  • Complementary and more competitive market positions in offshore and onshore upstream oil and gas, gas monetization, refining and chemicals, minerals and metals, power and clean energy, environment & infrastructure and pharmaceuticals
  • An expanded, geographically diverse global presence, with offices and projects in more than 50 countries
  • A material increase in capacity, with a total headcount of more than 40,000 employees
  • A strong financial profile, with annual pro forma revenues of approximately $10 billion and backlog of approximately $10 billion

Foster Wheeler believes that the meaningful equity component of the transaction consideration will allow its shareholders to participate in the strategic and commercial benefits of the combined company, including significant potential synergies. Under the terms of the transaction, Foster Wheeler’s existing shareholders will own approximately 23% of the combined company.

At the closing of the offer, two of the Company’s non-executive directors are expected to join AMEC’s board as non-executive directors.

The transaction is expected to close in the second half of 2014.

Press Release, February 13, 2014

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