SNC-Lavalin in line to buy Atkins for £2.1bn

The Canadian engineering and construction company SNC-Lavalin Group has launched a takeover bid for Atkins, offering about £2.1bn for the UK-based consultant. The Atkins board is willing to accept the deal, which at 2,080 pence per share, prices the company 35% above Atkins' closing share price on Friday.

"The board of Atkins has indicated to SNC-Lavalin that the possible offer would deliver value to Atkins shareholders at a level that the Board would be prepared to recommend, subject to reaching agreement on the other terms and conditions of the offer," Atkins said in a statement.

The respective boards are discussing other terms and conditions of the possible offer which is conditional upon diligence and financing, Atkins added. Atkins' shares jumped to a new high of 2,004 pence following news of the proposal. They were up 29% at 1,986 pence in afternoon trading.

In January, Atkins' share price rose sharply after it was rumoured that the company had been approached by CH2M about a possible £3.5 billion merger.

Last month, SNC chief executive officer Neil Bruce said the company has been weighing acquisitions to boost growth. It has also been cutting costs in order to lift margins at its core engineering and construction division.

Commenting on the development, Nelson Ogunshakin, chief executive of the Association for Consultancy and Engineering, said: “It was obvious that if the previous speculative Atkins/CH2M deal did not go through, there will be another move on either of the two businesses. The Canadian pension funds are seeking a good home for their large funds and the infrastructure asset base or services providers seem to be a very strong target.  

“Merger and acquisition is now widely accepted, by both SME and large companies, as an integral part of corporate growth strategy in the professional consultancy and engineering sector. With constant pressure on CEOs and business leaders to de-risk and seek diversified business portfolios, both in terms of sector and geographic reach, I expect to see further consolidation of the industry in the future.”