Atkins and SNC-Lavalin agree on acquisition terms
Uwe Kruger will step down from his role following the completion of the acquisition, expected to result in cost synergies worth $89m by the end of 2018
Canada's SNC-Lavalin will acquire UK-headquartered consultancy, Atkins, for $2.6bn (£2.1bn), it has been confirmed.
Atkins chief executive Uwe Kruger will step down from his role if the acquisition successfully completes.
SNC-Lavalin will pay £20.80 in cash for each Atkins share – a 35% premium to the closing price (£15.40) on March 31, 2017.
The acquisition, according to SNC-Lavalin's board, "represents a compelling opportunity to accelerate the delivery of [its] strategy to become a global fully integrated professional services and project management company".
In addition, the combined entity formed following the transaction would also help SNC-Lavalin add a "significant complementary presence in [...] the Middle East and Asia", among other key global markets.
By the end of 2018, annual cost synergies for both legacy organisations are expected by SNC-Lavalin to amount to approximately $89.1m (CAD120m), of which $66.8m (CAD90m) would be from Atkins, and $22.3m (CAD30m) from the Canadian firm.
Heath Drewett, current chief financial officer (CFO) and executive director of Atkins, has been offered to lead Atkins under the combined entity following the acquisition's completion.
Under the terms of this offer, Drewett will report to SNC-Lavalin’s president and CEO, and become a member of SNC-Lavalin’s executive committee, a company statement revealed.
Atkins's project portfolio in the Middle East includes Riyadh Metro, Dubai Metro, Burj Al Arab (pictured), and Doha Metro Red Line South.