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Amec buy secures world coverage

NEWS

CONTRACTOR AMEC last week underpinned its position as a global design and construction group with the £221M deal to buy Canadian engineering, construction and professional services firm Agra.

The deal gives it access to a large international client base operating in specialised areas, including infrastructure, oil and gas, chemicals and pharmaceuticals.

But Agra also has a strong track record in project management and of working with clients under partnering and framework agreements.

It is expected to merge with Amec's loss-making US Morse Deisel business to run as the firm's stateside operation.

The deal prompted an initial fall in Amec's share price as many analysts felt the price was high and that buying a North American firm when the US construction market was on a high was unwise.

However, many others see the deal as a good move for the firm in the long term. The resulting group, trading under the Amec name, will become the third largest in the league of global engineering design firms, behind US giants Fluor Daniel and Bechtel Group.

'This is a long term investment in global business opportunities,' said investment bank Flemings' construction analyst Alistair Stuart. 'Clients are saying they want a single point of responsibility for design and construction. They want somebody who can advise them worldwide. Amec is buying a firm with design capability and huge contact with internationally active clients.'

An Amec spokesman claimed no major restructuring was anticipated after the deal. But synchronisation of procurement and IT systems could take up to a year, he said.

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