AMEC agrees US$1.3bn French disposal

AMEC has agreed the €1.04bn (£707m, US$1.3bn) sale of French offshoot AMEC SPIE to funds managed by private equity firm PAI Partners.

The deal is expected to close around the middle of the third quarter and will generate an exceptional profit on disposal of £220m, according to AMEC.

The UK-based company provides project management and construction services to the utility and oil and gas industries.

AMEC SPIE provides electrical engineering, communications and specialist services to the energy and rail industries, predominantly in France. It had revenues in 2005 of £1.7bn and operating profit of around £50m.

The unit has 23,000 employees at 380 European locations.

AMEC intends to use the €1bn proceeds of the sale to reduce debt, placing the company in a net cash position immediately following completion.

The disposal is part of a wider policy of the company to separate its continuing operations into two entities, one focused on energy and process industries and the other on UK infrastructure.

In March, AMEC chief executive Sir Peter Mason said the strategy “will allow us on the one hand to capitalise on the profitability and growth opportunities in our core energy and process markets, and on the other to achieve a turnaround in our construction activities”.