Wood plc, a Scottish corporate mainstay instrumental in Aberdeen’s oil and gas prominence, is set to be acquired.
The Aberdeen-based firm, Wood plc, facing a significant valuation decline and potential collapse, will become a subsidiary of Sidara, a Dubai-based international engineering and design enterprise.
A shareholder vote on Monday ratified the takeover bid with 88% approval after months of delays stemming from Wood’s challenges in finalizing its accounts with its auditor.
The accounts, eventually released on October 30th, revealed a pre-tax loss exceeding £2 billion and indicated ongoing concerns from the auditor regarding figures spanning several years.
In recommending the offer to shareholders, the board of directors cautioned that any alternative refinancing attempt for the debt-laden company would likely yield a lower valuation, or even no return, for investors.
At its peak in 2013, Wood boasted a market valuation exceeding £5 billion and employed over 50,000 individuals in oilfields worldwide.
Formally known as the John Wood Group, the company will revert to this brand name under Sidara’s ownership.
Sir Ian Wood, who expanded the family business from its origins in fishing boat repair, retired as chairman 13 years ago.
Subsequently, he focused on philanthropic endeavors in Africa and Scotland, alongside coordinating support for Aberdeen’s broader energy economy and city center redevelopment.
In 2017, Wood acquired American rival AMEC Foster Wheeler, inheriting a substantial debt burden and legacy legal disputes.
Wood aimed to diversify its operations, extending its service offerings beyond oil and gas production to encompass refineries, chemical plants, urban design, and renewable energy engineering.
However, the company encountered difficulties stemming from contractual terms that proved costly.
Last year, Sidara initially proposed a £1.6 billion takeover bid but later withdrew, citing market uncertainties.
Upon returning with a renewed offer earlier this year, the Dubai-based partnership presented a significantly reduced proposal, eventually settling at £216 million.
In addition, Sidara has committed to injecting $450 million (£342 million) into Wood.
The company has divested several subsidiaries to bolster its finances. Recent reports indicate a workforce of 35,000 employees across more than 60 countries. Despite its financial challenges, Wood’s engineering reputation has continued to secure contracts.
The new owner intends to develop the Wood brand as its primary engineering and materials division.
Ken Gilmartin, the company’s chief executive since 2022, will step down following the deal’s approval, with Iain Torrens, the chief finance officer, slated to succeed him.
Roy Franklin, Wood’s chairman since 2019, has also announced his intention to resign.
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