SNC-LAVALIN has agreed to pay C$3.6bn (US$2.67bn) for UK engineering services company WS Atkins.
The two companies revealed earlier in April that they were in talks to establish the terms of a takeover deal, after SNC-Lavalin offered £20.80/share (US$26.61/share), a price the Atkins board said that it would be willing to recommend. The terms of the agreement have been recommended by both boards of directors. The merged company will be worth C$12.1bn and employ 53,000 people.
The combined company will retain SNC-Lavalin’s current headquarters in Montreal, Canada. SNC-Lavalin says that buying Atkins will, amongst other things, bring complementary capabilities to the company with little overlap, will increase its margins and will allow it to win a broader variety of work, particularly nuclear maintenance and decommissioning. The merger is expected to deliver C$120m of cost synergies, including by eliminating listings costs, streamlining IT systems and office consolidation.
SNC-Lavalin CEO Neil Bruce said that the merger will create a “global fully integrated professional services and project management company – including capital investment, consulting, design, engineering, construction, sustaining capital and operations and maintenance.”
He added: “It also creates new revenue growth opportunities in key geographies by positioning us to capitalise on increased cross-selling and the opportunity to win and deliver major projects in new regions. I look forward to welcoming Atkins’ employees into our combined company.”
Atkins chairman Allan Cook said that combining the companies would create “clear benefits” for shareholders and allow a broader service to customers.
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