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The oil services company, based in Aberdeen, has said that the deal will result in "significant cost and revenue synergies".
Under the terms of the all share transaction, Wood Group would hold 44% of the new entity.
Commenting on the announcement, Ian Marchant, Chairman of Wood Group, said: "The combination extends the scale and scope of our services, deepens our existing customer relationships, facilitates further development of our technology-enabled solutions and broadens our end market, geographic and customer exposure.
"The combination will create an asset-light, largely reimbursable business of greater scale and enhanced capability, diversified across the oil & gas, chemicals, renewables, environment & infrastructure and mining segments.
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"Delivering significant sustainable synergies will also result in a leaner and more competitive combined group, creating value for shareholders."
John Connolly, Chairman of Amec Foster Wheeler, added: "The Amec Foster Wheeler Board have fully supported the revised strategy and the preparations to deliver the appropriate balance sheet to support the standalone prospects of Amec Foster Wheeler.
"However, the Amec Foster Wheeler Board believes that a combination with Wood Group adds to the standalone prospects of Amec Foster Wheeler, by accelerating the delivery of the future value inherent in the Amec Foster Wheeler business and, at the same time, helps to realise the full potential of each of Amec Foster Wheeler and Wood Group.
"The all-share structure of the offer allows our shareholders to benefit from the significant synergies and other strategic benefits that are expected to be realised from the combination."
If the agreement is approved, Robin Watson and David Kemp – Chief Executive and Finance boss of Wood Group, respectively – will continue in the same roles in the combined entity. Ian Marchant is also set to continue as chairman of the new firm.
Image: Ian Marchant.
(JP/CD)
