Atkins agrees £2.1bn takeover by SNC-Lavalin

Canadian engineering and construction company SNC-Lavalin Group has agreed a takeover deal with Atkins which values the company at £2.1bn. 

Both boards have agreed the deal which will create a company with 53,000 employees. The deal will now have to be approved shareholders - each of whom will receive £20.80 a share - and is expected to be finalised in the third quarter of this year. The offer price represents a 35% premium on last Atkins’ closing share price.

Commenting on the deal, Neil Bruce, president and chief executive officer of SNC-Lavalin, said: “By combining two highly complementary businesses, we will increase our depth and breadth of services to position us as a premier partner to public and private sector clients. It also 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.

“I look forward to welcoming Atkins’ employees into our combined company. Together, we will become part of a larger global organisation that will open the door to new opportunities for further growth and development.”

As part of the integration process, a review of the Atkins businesses will be completed with the Atkins leadership team to determine any organisational and structural changes that should be implemented to benefit the combined entity. SNC-Lavalin said that they do not expect the integration review to have a material impact on the continued employment of Atkins’ employees.

However, current Atkins chief executive Uwe Krueger is to step down to be replaced by current chief finance officer Heath Drewett. Drewett will report into SNC-Lavalin’s president and chief executive officer and become a member of SNC-Lavalin’s executive committee. SNC-Lavalin has also set aside £5m in cash “retention payments” to ensure that senior Atkins managers stay at the firm for at least the next 12 months.

SNC-Lavalin said that the integration work carried out to date had confirmed the potential to generate cost savings for the combined business “through corporate, functional and administration efficiencies, including reducing headcount in those areas as well as indirect cost savings.” SNC-Lavalin say that they expect to make £50m in annual cost saving at Atkins.

During the takeover period the Atkins brand will remain but this will be looked at in the long-term depending on client feedback. SNC-Lavalin has also pledged to not cut wages, notice periods or pension rights for all employees for at least two years.

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