Worley Parsons to acquire Jacobs' ECR

Lloyd Doyle
October 22, 2018

The acquisition will form a major global player in hydrocarbons, chemicals, minerals and metals, providing project and asset services in resources and energy.

WorleyParsons has signed a $3.3 billion deal with USA group Jacobs Engineering to acquire several of its units in a move that will help the Australian player grow its engineering services arm.

Jacobs said it expects to receive $2.6 billion in net proceeds from the transaction, which has been approved by both boards and is expected to close in the first half of 2019.

Jacobs said it has entered into a definitive agreement to transfer its ECR business to WorleyParsons, an engineering-services provider, via $2.6 billion in cash and $700 million in WorleyParsons ordinary shares.

"We are excited to combine Jacobs ECR's world-class capabilities with our global platform to create a leader across our key focus sectors, with great earnings diversification and resilience".

"The transaction will bring complementary capabilities in key business lines, including a best-in-class onshore and downstream maintenance, modifications and operations capability, allowing customers to benefit from an expanded integrated solutions offering".

Jacobs Engineering shares rallied more than 8% on the news.

Shares in WorleyParsons last traded at $17.84 - roughly a sixfold increase since February 2016 - before being placed in a trading halt prior to today's open.

John Grill, the founder and Chairman of WorleyParsons, has committed to take up $A100 million in the entitlement offer.

The latest deal comes amid a major portfolio shake-up as Jacobs following its purchase of rival CH2M Hill past year and the £2.2bn takeover of Amec Foster Wheeler by United Kingdom oilfield services firm John Wood Group.

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