Atkins board agrees to Â£2.1bn takeover approach from Canada's SNC Lavalin
The board of UK-based construction consultancy Atkins has accepted a Â£2.1 billion (Dh9.88bn) offer for its business from SNC Lavalin, the Canadian construction and engineering group.
The offer, which was first announced this month, values Atkins at Â£20.80 per share, a 35 per cent premium on the Â£15.40 price that the shares closed at on the day before the news broke.
In a statement on Friday, SNC Lavalin said the merger would create a business with revenues of C$12.1bn (Dh32.92bn) and 53,000 employees worldwide. It also said it expects to generate C$120 million in savings by combining the two businesses, C$80m of which is expected to come from Atkins.
Atkins and SNC Lavalin have a significant presence in the Middle East, and the combined business will have more employees in the wider Middle East and Africa than any other global region – 19,625. The company said it expects to generate about 20 per cent of its business from this region once the transaction is completed.
In an interview with The National in July last year, SNC Lavalin’s regional chief executive Alan McLean said it employs about 11,000 staff in the Middle East and generates about 15 per cent of its revenue from the region. Most of these staff are contractors who had previously worked for the Kentz business acquired by SNC Lavalin for Â£1.2bn in 2014, and the energy sector remains its biggest source of regional revenue, followed by infrastructure projects.
Atkins employs 2,400 people in the Middle East and earns 14 per cent of its global revenue of Â£2bn from this region. It is working on a number of significant projects, including four new economic cities in Saudi Arabia for the Economic Cities Authority, the Riyadh and Doha metro projects, and the Port Sultan Qaboos redevelopment in Oman.
Neil Bruce, the president and chief executive of SNC Lavalin, said the takeover “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”.
He said it would “position us as a premier partner to public and private sector clients”.
Allan Cook, the chairman of Atkins, said SNC Lavalin’s offer represented “an attractive and certain value in cash for Atkins shareholders, reflecting the high quality of the business”.
The world of construction and engineering consultancies has undergone a wave of consolidation in recent years as firms bid to build global scale. Aecom completed a US$6bn takeover of rival firm URS in October 2014, the same month WSP completed an Â£820m buyout of US-based consultancy Parsons Brinckerhoff from British contractor Balfour Beatty. The Dutch-headquartered consultancy Arcadis has also acquired Hyder and project management firm EC Harris in recent years, while the world’s third-biggest consultancy, WorleyParsons, last month announced that it had recently rebuffed a takeover offer from Dubai-based Dar Group. The Dar Group has retained a 13.45 per cent stake in WorleyParsons.
SNC Lavalin’s takeover of Atkins is expected to be completed in the third quarter of this year.
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