Wood Group is looking to acquire Amec-Foster for £2.2 billion, and the oil and gas contractor, which provides oilfield services, has managed to win support from shareholders for the deal even though the Serious Fraud Office is investigating the takeover.
Both Wood Group and Amec Foster Wheeler are being investigated over allegations of corruption, bribing and money laundering at Unaoil. This investigation could pose an obstacle to Wood Group’s efforts to transform its business model to cope with the downturn that the oil services industry is experiencing.
In May, Amec Foster Wheeler revealed that it was cooperating with the Serious Fraud Office, and this could result in an investigation and adversely affect the Wood Group takeover, as it could lead to significant penalties.
Unaoil, which is based in Monaco, is supposed to have been the middleman, setting up deals between oil-rich countries and oil and gas contractors and companies looking for profitable contracts. It is claimed that the company was responsible for setting up the bribes that energy companies paid to get contracts. This allegation emerged in a news article in 2016.
Wood Group is also connected to this scandal. It has a joint venture in Kazakhstan that had some dealings with Unaoil. However, the oil and gas contractor stated that its internal investigation did not show that any illegal activity took place.
A source who is close to the deal said that Wood Group has allayed the misgivings of shareholders by assuring them that a prospective Serious Fraud Office penalty has been included into the deal through a lower offer price.
Even proxy advisors and analysts have advised shareholders to back the deal as it would be a strategic and logical investment.
It is anticipated that when shareholders vote in the middle of June, they will vote in favour of the acquisition, and this will allow Wood Group to sell off a major part of Amec Foster Wheeler’s assets located in the North Sea.