Amec has bought more than 80% of Babcock International’s process division for just £1.
The acquisition covers businesses that lost £6.3m on a turnover of £42.8m in 1996-97. They employ more than 800 people world-wide.
Babcock is retaining the specialised and profitable engineering companies in the division, Babcock Water Engineering and the US pipeline company BKW Eagleton.
Dr John Parker, Babcock’s chairman, said the deal completed the disposal of two of the three loss-making operations that were eroding the profits of the group’s core materials handling and facilities management businesses. `We really want to exit the heavy end of contracting and the risk that goes with it.’
He said, however, that the process operation could be profitable covered by the central overheads of a big player in the market. Amec said the purchase would strengthen its capabilities in onshore projects for the oil and gas, petrochemical, coal and steel industries.
The acquisition involves assets worth £4.8m.