Amec said the deal would improve its geographical footprint by more than doubling its revenues in faster-growing regions, and would add mid- and downstream capabilities to its existing upstream focus.
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Under the offer terms, Amec said Foster Wheeler shareholders would receive approximately 0.9 Amec shares and $16 in cash, representing $32 for each Foster Wheeler share. Shares in Foster Wheeler closed at $31.46 on Friday.
Should the deal complete, Foster Wheeler will hold shares in Amec representing 23 percent of the enlarged company, and Amec would seek a U.S. listing in connection with the transaction, the companies said.
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Foster Wheeler said it had agreed with Amec not to solicit alternative proposals up to Feb. 22, and would pay out a one-time dividend of $0.40 per share prior to closing should the companies close the deal.
Amec said the cash component of the offer, $1.595 billion, will be financed by its existing cash resources and new debt financing.
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Amec, which has a market capitalisation of 3.21 billion pounds and provides services and equipment for the oil, gas and mining sectors, has been on the hunt for acquisitions, and media reports last year suggested that it was interested in Foster Wheeler.
Last August, it had a 680 million pound approach for British peer Kentz rejected by the target company's board.
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