Wood Group's planned £2.2 billion merger with Amec Foster Wheeler is to go ahead after proposals to address competition concerns were approved by the Competition and Markets Authority (CMA).

The CMA launched an investigation into the deal in June following concerns over the supply of engineering and construction services, as well as operation and maintenance services, to the Upstream Offshore oil and gas sector in the UK Continental Shelf.

Both companies offered to sell Amec Foster Wheeler's businesses in these areas to address competition concerns, which the CMA has now accepted.

Amec Foster Wheeler's relevant assets will now be sold to a purchaser approved by the CMA.

Kate Collyer, Deputy Chief Economic Adviser and decision maker in this case, 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.

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"The CMA is committed to conducting merger investigations as quickly and efficiently as possible. In this case, the CMA worked with the companies on a ‘twin-track' approach, engaging with them on shaping remedies that might mitigate competition concerns, if any were found, whilst still investigating whether such concerns arose.

"This enabled us to promptly reach a final view on the proposed remedy after competition concerns were identified, helping to reduce uncertainty about the potential impact of the merger for customers within this industry."

Robin Watson, Chief Executive of Wood Group, 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."

Jon Lewis, Chief Executive Officer of Amec Foster Wheeler said: "We welcome today's 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."

(LM)