SNC-Lavalin Group has entered into an agreement to acquire UK-based engineering and consultancy firm WS Atkins for $3.6bn in an all cash transaction.
In this connection, the Canadian engineering and construction company, SNC-Lavalin Group has offered to buy each of Atkins’ shares at £20.80.
The transaction has been approved by the boards of directors of the two companies.
The acquisition of Atkins, which a major player in the infrastructure, transportation and energy areas, is expected to help the Montreal-headquartered SNC-Lavalin in consolidating into one of the biggest fully integrated professional services company worldwide.
It is also likely to create growth and expansion both in terms of services and revenue. The transaction has the potential to deliver about $120m in cost synergies for the two parties.
SNC-Lavalin Group president & CEO Neil Bruce said: “By combining two highly complementary businesses, we will increase our depth and breadth of services to position us as a premier partner to public and private sector clients.
“It also creates new revenue growth opportunities in key geographies by positioning us to capitalize on increased cross-selling and the opportunity to win and deliver major projects in new regions.”
Founded in 1938, Atkins had earned about £2bn in 2016. Employing 18,000 people, it currently operates in the US, Asia and Middle East besides having a major position in its home country and in the Scandinavian market.
Atkins chairman Allan Cook said that SNC-Lavalin’s offer reflects the high quality of the business, its people and its future prospects while being an attractive one for the company shareholders.
Cook added: “The Board of Atkins believes that a combination will provide clear benefits to our shareholders, enhanced opportunities for our employees as part of a larger group, and a broader service offering for our customers.”
SNC-Lavalin will carry out a review of the Atkins operations on whether implementing any organizational and structural changes in the latter would have any benefit for the combined entity.
The integration review is not likely to have a material impact on the continued employment of the of Atkins' employees, said SNC-Lavalin.
SNC-Lavalin corporate headquarters in Montreal, Canada. Photo: courtesy of User:Gene.arboit/Wikipedia.