In May, Wood Group had offered to divest most of Amec Foster Wheeler's oil and gas business in the UK North Sea to address competition concerns arising out of its merger.

The offer was made after the UK’s Competition and Markets Authority (CMA) launched an investigation into the deal to find out whether it would lead to competition issues in the upstream offshore oil and gas sector in the UK Continental Shelf.

In August, the CMA had found that the proposal offered by the two companies would, in principle, be suitable to address its competition concerns.

The competition watchdog said that it is now satisfied the issues it identified will be fully addressed by the remedy offered.

Wood Group said: “The CMA has today accepted the remedy formally offered by Wood Group and Amec Foster Wheeler on 9th August. This follows the CMA’s in principle acceptance on 15 August.”

Amec Foster Wheeler’s assets will be sold to a purchaser approved by the CMA.

However, the two companies are not required to complete the asset sale before completing the merger.  

With the acceptance of the remedy, the CMA has now decided not to refer the merger an in-depth investigation.

Wood Group expects to complete the merger in October 2017, after receiving an approval from in Mexico.

Amec Foster Wheeler chief executive officer Jon Lewis said: “We welcome today’s announcement from the CMA.

“We have made significant progress marketing Amec Foster Wheeler’s UK upstream oil and gas business to a range of high quality bidders, which has helped to ensure that we will close the transaction in October, bringing the many benefits of the combined company to our clients, colleagues and shareholders.”

In March, Wood Group had signed an agreement to take over UK-based rival Amec Foster Wheeler.

The merger is expected to result in creating an asset-light business of improved scale and capability, with a presence across the oil and gas, chemicals, renewables, environment & infrastructure and mining segments.

Image: The CMA has now decided not to refer the merger an in-depth investigation. Photo courtesy of © Crown copyright.