Wood Group estimates higher cost savings from Amec Foster deal
(Reuters) -- Oil services company John Wood Group Plc said it expected about 36% more cost savings from its deal to buy Amec Foster Wheeler Plc for $2.7 B than it first estimated when announcing the deal in March.
Wood Group said it has been able to increase the expected level of pretax cost synergies from at least 110 MM pounds to at least 150 MM per year by the end of the third year after the deal closes.
Cost savings would come from operating, corporate and administration efficiencies, Wood Group said.
Wood Group agreed to buy Amec Foster last month, seeking rewards from the fast-growing US shale energy sector.
Wood Group, a 35-year old company based in the Scottish city of Aberdeen, grew out of helping companies in the now declining North Sea oil basin. It said the deal would enable it to expand in areas best placed to benefit from an upturn in commodity prices, notably the US onshore shale oil and gas sector.
Reporting by Arathy S Nair in Bengaluru; Editing by David Holmes
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