WorleyParsons is set to acquire Jacobs Engineering Group’s energy, chemicals and resources (ECR) division for $US3.3 billion ($4.65 billion).
The acquisition will form a major global player in hydrocarbons, chemicals, minerals and metals, providing project and asset services in resources and energy.
WorleyParsons chief executive Andrew Wood said, “The acquisition of Jacobs ECR is important for our customers, shareholders and employees.
“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.”
WorleyParsons will fund the acquisition through an entitlement offer of $2.9 billion, on top of $985 million of company stock and $895 million of additional debt.
Jacobs will, in turn, own 11 per cent of the enlarged and combined entities.
The acquisition is expected to complete in the next four to six months, pending regulatory approvals.
Wood said, “The transaction will bring complementary capabilities in key business lines, including a best-in-class onshore and downstream modifications and operations (MMO) capability, allowing customers to benefit from an expanded, integrated solutions offering.
“Shareholders will have exposure to material earnings per share (EPS) accretion, a strong long-term growth outlook and a conservatively leveraged balance sheet, while our employees will have increased opportunity for development as part of the leading global project delivery provider in our sectors.”
WorleyParsons expects to deliver improved earnings in the 2019 financial year, accounting for its acquisition and continued improvement in market conditions.
The company has recently won multiple contracts and contract extensions from Chevron, Neptune Energy and Yanbu Aramco Sinopec Refining Company.