The £2.2bn takeover of Amec Foster Wheeler by rival Wood Group has been accepted by the Competition and Markets Authority (CMA) allowing the deal to be completed.
The deal is expected to complete in October this year following merger clearance in Mexico.
The deal was first announced in March this year in which it was announced Amec Foster Wheeler shareholders would get a 44% share in the larger group. But concerns were raised by the CMA after its initial investigation into the takeover.
It feared the merger of the two closely competing firms would cut the number of major players active in the UK’s upstream offshore oil and gas market from four to three.
The remedy now accepted by the CMA, means Wood Group will now acquire the majority of Amec Foster Wheeler’s UK upstream oil and gas business located in the UK and UK customers.
CMA deputy chief economic adviser and decision maker in this case Kate Collyer said: “It is crucial that competition is maintained in this major UK industry.
“We have therefore conducted a thorough investigation into this merger, and believe that the sale of Amec Foster Wheeler’s assets will address our concerns and ensure that customers in the North Sea continue to be able to obtain competitive bids.”
The new company is expected to have a combined value of around £5bn. Savings are expected to reach £110M per year.
Wood Group chief executive Robin Watson said: “Since we announced the deal in March, both parties have maintained a relentless focus on keeping on schedule.
“Today’s earlier than anticipated decision from the CMA allows us to move forward with pace and we are very confident of completing the acquisition of Amec Foster Wheeler in October.”
Amec Foster Wheeler chief executive Jon Lewis said he welcomed the announcement from the CMA.
“We have made significant progress marketing Amec Foster Wheeler’s UK upstream oil and gas business to a range of high quality bidders, which has helped to ensure that we will close the transaction in October, bringing the many benefits of the combined company to our clients, colleagues and shareholders.”