Canadian engineering and construction company SNC-Lavalin Group has made an offer to acquire UK-based engineering and consultancy firm WS Atkins for £2.1bn ($2.6b).

Confirming the takeover talks, SNC-Lavalin said it offered to acquire the entire issued and to-be-issued share capital of Atkins for 2,080 pence per share in cash.

The proposed offer is part of the Canadian company’s efforts to expand its global operations with acquisitions and reduce its dependence on oil and gas.

Atkins said in a statement: "The board of Atkins has indicated to SNC-Lavalin that the possible offer would deliver value to Atkins shareholders at a level that the Board would be prepared to recommend, subject to reaching agreement on the other terms and conditions of the offer.”

The UK firm said that it is discussing other terms and conditions with SNC-Lavalin over the possible offer which is subject to diligence and financing.

If the deal is signed, Canada’s second-biggest pension fund manager Caisse de Depot et Placement du Quebec will contribute up to C$1.9bn ($1.4bn) to SNC for the acquisition. This would come in the form of C$400m ($299.6m) in equity and C$1.5bn ($1.12bn) in non-recourse financing.

SNC-Lavalin plans to raise the remainder of the financing through a mix of debt, equity and other financing means.

Atkins further said: “There can be no certainty that a firm offer will be made, nor as to the terms on which any firm offer might be made.”

With offices in more than 20 countries, SNC-Lavalin offers engineering, procurement, construction, completions and commissioning services to oil and gas, mining and metallurgy, infrastructure and power sectors.


Image: SNC-Lavalin corporate headquarters in Montreal, Canada. Photo: courtesy of User:Gene.arboit/Wikipedia.