AMEC to expand pharma plant design biz with $3bn Foster Wheeler buy

13-Jan-2014 - Last updated on 13-Jan-2014 at 14:19 GMT

AMEC has announced its plan to buy US firm Foster Wheeler AG for $3.2bn (€2.3bn) in a deal that includes the latter’s pharmaceutical plant design services business.

The non-binding sale agreement – further terms of which have not been disclosed – was confirmed by Foster Wheeler earlier today which said that it has agreed not to solicit alternative proposals until February 22. It also said that the proposed deal followed a strategic review.

Both parties are involved in oil and gas engineering and a spokeswoman for AMEC told Outsourcing-pharma.com this was the main motivation for the proposed takeover.

“The main attraction is Foster Wheeler’s prowess in engineering, design and project management,” she said, adding that the firm employs a 13,000 strong workforce worldwide.

Pharma plants

Foster Wheeler is also involved in the design and development of pharmaceutical and biopharmaceutical manufacturing facilities, with capabilities in the design of active pharmaceutical ingredient (API) sites, pilot plants, R&D labs and logistics centres.

This part of its business was expanded in January last year when the firm acquired Yonkers Industries, a specialist in the construction and commissioning of pharma plants and the provision of procurement services.

That deal – financial terms of which were not made public – added Yonkers’ offices in California, North Carolina and Puerto Rico to Foster Wheeler’s network, which is known as its E&C Group.

According to the firm’s latest financial report revenue from the pharmaceutical industry for the three months ended September 30 was $29m, up from $13m in the year-earlier comparable quarter.

At the time Foster Wheeler said: “We believe that global demand for energy, chemicals, minerals and pharmaceuticals will continue to grow over the long-term and that our clients will continue to invest in new and upgraded capacity to meet that demand.”

According to its website the firm has been involved in the development of an API plant in Ireland for Takeda, a vaccine production site in Hungary for GSK and an oral solid dose plant in for Novartis and an R&D site for Schering-Plough in Singapore.

But despite this track record of working with some of the largest drug firms in the world, Foster Wheeler’s pharmaceutical plant design operation was not a major driver for the proposed takeover according to the AMEC spokeswoman, who described the unit as a “small part of the business.”

Foster Wheeler did not respond to a request for comment ahead of publication.