U.K. Opens Bribery Investigation Into Amec Ahead of Merger
U.K. SFO Opens Bribery Investigation Into Amec Foster Wheeler
(Bloomberg) -- U.K. prosecutors opened an investigation into British engineering firm Amec Foster Wheeler Plc over possible bribery and corruption linked to its use of third parties.
The Serious Fraud Office will examine the actions of Amec and its subsidiaries, as well as "company officers, employees, agents and any other person associated with any of these companies for suspected offenses," according to a statement Tuesday. Amec said the probe isn’t expected to affect its 2.2 billion-pound ($2.8 billion) takeover by John Wood Group Plc.
The investigation comes at a bad time for Amec, just weeks after Wood Group’s proposed acquisition was approved by shareholders from both companies. The deal is scheduled to be completed by the end of the year. The probe is the latest in several bribery investigations announced by the SFO, including into Petrofac Ltd., with many connected to consulting firm Unaoil Monaco SAM.
Amec tumbled as much as 11 percent on Wednesday in London trading, the most since October, and was down 10 percent at 408.8 pence as of 9:07 a.m. local time. Wood Group fell 8.9 percent to 567.5 pence.
Wood Group assessed the risk of a potential investigation into Amec before making its all-share takeover bid in March, Chief Financial Officer David Kemp said last month. As part of the due-diligence process, Amec revealed it had “disclosed information” to authorities in the U.S., where it has a listing, he said. Wood Group reiterated in a statement on Wednesday that it had disclosed the possibility of an SFO probe as part of a prospectus in May.
Separately, Amec said that while it’s “not possible to estimate reliably” the potential effect of the probe’s outcome, the investigation “is not expected to have an impact on the completion of the merger.”
The tie-up could help the engineering companies cut costs, diversify and become more competitive following several years of pressure on profit as oil’s slump curbed client spending.
--With assistance from James Herron
To contact the reporter on this story: Suzi Ring in London at sring5@bloomberg.net.
To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Susan Warren, Amanda Jordan