The Fall of Wood: A Sequel

In February I wrote the piece, The Fall of Foster Wheeler: A Tale of Engineering and Ambition, and that post can be read here:- https://medium.com/@tracyrenee61/the-fall-of-foster-wheeler-a-tale-of-engineering-and-ambition-7265cd54603b

I worked for Foster Wheeler Energy Limited from 2006 to 2014, so I was privy to some of the bad business practices and corruption that prevailed within that company. I decided to write about the decline of this major player in the oil and gas sector, and rushed the work through in a week, so there are some typographical errors in the document that need correcting. Maybe one day when I have more available time, I will review the work and correct the typographical errors in the document.

The Fall of Foster Wheeler: a tale of engineering and ambition is a piece that details the rise and fall of a great engineering organisation. This fall was caused by the corrupt business practices of several senior executives in the business.

Foster Wheeler was bought by another engineering conglomerate, Amec, and the two companies merged to become Amec Foster Wheeler. The negativity of Foster Wheeler’s corruption did not go away just because the company merged with another company, and this caused the merged business to fall into decline as well.

In 2017 Amec Foster Wheeler, the newly merged conglomerate, was sold to Wood Group. Part of the acquisition was that Wood group had to take on the burden of Foster Wheeler’s debt and litigation.

Recent news has revealed that Wood Group (now called Wood) has suffered the consequences of purchasing Amec Foster Wheeler, and this work intends to cover the main aspects of that ill-fated acquisition. Because I have not worked at Wood, I do not any inside information that I can fall back on, so I have had to rely on information that is in the public domain.

Wood Group’s history prior to its acquisition of Amec Foster Wheeler

In the 1970’s JW Holdings diversified into North Sea oil services.

In 1982 John Wood Group plc was officially founded by Sir Ian Wood in Aberdeen, Scotland.

In 1993 Wood Group acquired J P Kenney, a subsea engineering firm, making entry into underwater pipeline design.

Also in the 1990’s, Wood Group expanded into Latin America and Russia, building a global presence.

In 2000 Wood Group acquired Mustang Engineering (a Texas based oilk rig business) for $137.5 million.

In 2002 the company was listed on the London Stock Exchange, becoming a publicly listed company.

In 2011 the company sold Wood Support Division to GE for $2.8 billion, and acquired PSN (production services network) to strengthen its off-shore operations.

In 2012 Wood Group began environmental consulting work for Heathrow Airport expansion.

In 2015 Wood Group acquired Kelchner (civil construction)b and Infinity Group (petrochemicals), expanding it into infrastructure and downstream services.

In 2017 Wood Group completed the transformative merger with Amec Foster Wheeler, creating one of the world’s largest engineering and construction firms. It is worth nothing that this merger spelt the end of the Foster Wheeler independent entity.

Wood Group’s acquisition of Amec Foster Wheeler

Wood Group’s acquisition of Amec Foster Wheeler was predatory in nature. Amec Foster Wheeler’s weakened financial state and debt burden made it a vulnerable target, prime to be taken over.

There were competition concerns between a merger between Wood Group and Amec Foster Wheeler. The Competition and Markets Authority (CMA) investigated the proposed merger, raising concerns about a substantial lessening of competition (SLC) in the UK’s upstream offshore oil and gas due to the close competition between the two companies. To address these competition concerns, the CMA required the merged entity to divest certain assets, including Amec Foster Wheeler’s upstream oil and gas business, to a suitable purchaser.

Wood Group’s acquisition of Amec Foster Wheeler in 2017 was a transformative, all-share deal valued at approximately £2.225 billion.

This deal was an all share offer that was announced on 13 March 2017 and was finalised on 9 October 2017. Wood Group acquired 100% of Amec Foster Wheeler’s issued and to-be-issued share capital.

Based on Wood Group’s share price of £7.52, the deal valued Amec Foster Wheeler at £2.225 billion. Amec shareholders received 0.75 Wood Group shares for each Amec share held.

(It is worth nothing that Amec purchased Foster Wheeler for approximately £1.9 billion in a cash and share transaction. Foster Wheeler shareholders received 0.75 Amec shares for each Foster Wheeler share plus $16 in cash per share. The deal required approival from Foster Wheeler shareholders and regulatory bodies in multiple jurisdictions to incluse the US Securities Exchange Commission and Swiss authorities.)

The UK Competition and Markets Authority (CMA) raised concerns about the potential lessening of competition in the engineering services market. To avoid a Phase 2 investigation, Wood Group and Amec Foster Wheeler agreed to undertakings, including:-

• Divestment of certain overlapping business units.
• Commitments to maintain competitive practices.
• Implementation of risk management and control process from day 1.

The strategic rationale of merging the two organisations was to create a global leader in project, engineering, and technical services across energy and industrial markets. Wood Group aimed to:-

• Broaden its geographic and sector reach
• deliver cost synergies and incremental revenue
• Maintain a reimbursable, asset-light model with balanced risk appetite.

In October 2017 Wood completed the acquisition of Amec Foster Wheeler. This acquisition was expected to accelerate the company’s growth strategy by four years as well as providing jobs potential for the north-east of the UK.

Following Wood’s acquisition of Amec Foster Wheeler the company’s value rose to £4.82 billion. Wood’s acquisition of Amec Foster Wheeler, however, brought with it substantial debt and legal liabilities.

For instance, in 2016 Amec Foster Wheeler was sued by Enterprise Products Limited over a contract for a chemicals plant in Texas. The US midstream energy services company was initially seeking more rhan £550 million amid cost increases and delays to reimburse payments. Wood agreed a settlement of around £97.5 million, which was paid over a period of seven days in 2022.

The Amec Foster Wheeler deal also ended up in a £140 million settlement in 2021, relating to historical bribery and corruption charges. The legal repercussions came after Amec Foster Wheeler conspired to pay approximately £870,000 in bribes to officials at Brazil’s state-owned oil company, Petrobas.

The decline of Wood Group

Amec Foster Wheeler was embroiled in investigations over allegations of bribery and corruption, and these investigations took place in jurisdictions where the corrupt business practices took place.

The US Department of Justice investigated Foster Wheeler’s use of third-party agents to secure contracts through bribery. It focused on activities in Brazil and the Middle East between 2011 and 2014. Foster Wheeler entered into a three-year Deferred Prosecution Agreement b(DPA) with Wood Group.

The US Securities Exchange Commission conducted a parallel investigation into violations of the Foreign Corrupt Practices Act (FPCA) and issued a cease-and-desist order as part of the resolution.

The UK Serious Fraud Office (SFO) led a major probe into systemic corruption from 1996 to 2014.

The Brazilian authorities also investigated Foster Wheeler’s corruption.

As part of Wood’s acquisition of Amec Foster Wheeler, the company agreed to take on the debt and litigious obligations of the company that it had purchased.

Wood Group cooperated fully with authorities in the UK, US and Brazil to resolve the bribery and corruption investigations inherited from Foster Wheeler. This cooperation included reaching settlements totalling $177 million.

The last year that Wood Group made a profit was in 2016, one year before the company purchased Amec Foster Wheeler in 2017. Some financial reflections on the financial health of Wood Group can be seen in the table below, using financial documents that have not been restated:-

The fall of Wood (formerly Wood Group) was a market collapse in the oil and gas sector after its acquisition of Amec Foster Wheeler, which led to Wood’s financial struggle and share price drop after 2017. While the merger aimed for cost savings and broader reach, the downturn meant significant debt, a need for extensive restructuring and job cuts for the combined company, and ultimately a decline in its value. The merger exposed Wood to significant operational and financial difficulties, including large scale write-offs and a substantial reduction in staff.

On 20 February 2025, Ian Banks wrote the article in the Press and Journal, entitled, “What has gone wrong at Aberdeen firm Wood after share price collapse”, that Wood’s share price has dropped in value by more than 97%.

In 2017 Wood was valued at more than £5 billion and it bought one of its largest rivals as part of growth plans. As at February 2025, Wood’s worth was less than £200 million, being a far cry from its market capitalisation of £4.38 billion in 2017.

Since 2017, however, failed takeover attempts, job cuts, and plunging profits have led to the company’s share prices dropping by more than 97%.

Wood Group as a target for takeover

Following a series of setbacks, Wood became a takeover target for other oil and gas companies.

Starting in 2023 Wood knocked back five proposals for US firm Apollo Global Management, but Wood did not accept any of the company’s offers.

In 2024 Wood started the year by announcing 22 job cuts in Aberdeen, intended to save money and improve financial performance.

In August 2024 Wood announced it was selling two businesses in deals worth £125 million. The group signed an agreement for the sale of its majority stake in Aberdeen based Ethos Energy, as well as its equity in CEC controls.

When Wood announced an urgent independent review of its accounting statements, the engineering firm saw a free-fall of the business.

Wood revealed a difficult and disappointing financial year and said significant work has taken place since the start of its urgent independent review by the accountancy firm, Deloitte.

Deloitte identified weaknesses and failures in Wood’s financial culture, governance and controls.

Wood was expecting a very strong trading performance in the final quarter of 2024 but it failed to materialise. This led to the decision to cancel the company’s executive and employee bonus for the year.

On 19 February 2025 Wood’s Chief Financial Officer (CFO) resigned after eleven months over an incorrect description of his professional qualifications. Arvind Balan described himself as a chartered accountant when he was actually a certified practising accountant.

On 31 Match 2025, Holly Williams wrote in Yahoo!Finance the piece entitled, “Wood Group warns over need to restate accounts after weaknesses uncovered.” wood’s shares have tumbled since the oil and gas company said it was set to suspend shares after warning it would restate accounts following cultural failings uncovered in a review.

Wood said it was expected to make material adjustments to previous financial statements and it’s balance sheet for the previous three financial years.

At the time that this news article was published, Wood stated that it was still in talks over a potential takeover by Sidara, a privately held network of engineering and design companies run from the United Arab Emirates (UAE).

The material weaknesses uncovered by the accounting management pressure and override to maintain previously reported positions, including through unsupported dispensations, and over optimisation and/or lack of evidence in respect of accounting judgements.

The cultural failings appear to have led to instances of information being provided to Wood’s auditors.

Wood stressed there has since been significant change within the group and steps taken to address the failings discovered.

In April 2025 Wood delayed the publication of its annual results due to a pending audit, leading to a temporary suspension of its shares on the London Stock Exchange. The Financial Conduct Authority (FCA) also launched a probe into some of Wood’s contracts and charges.

Wood Group’s history leading up to its takeover

From 2021 to 2023 Wood sought repositions toward sustainable solutions, growing renewables and consulting revenue to $1.3 billion.

In 2024 Wood launched a major financial governance overhall following internal review. Wood committed to cultural and operational reform.

In 2025 Wood employed over 35,000 people globally, with operations in over 60 countries.

Wood Group’s corporate scandal

In 2024 and 2025 Wood experienced a financial culture scandal. An independent review by the accountancy firm, Deloitte, was commissioned in late 2024, and this review uncovered serious issues within the company’s projects division, including:-

• Material weaknesses in financial culture
• Inappropriate management pressure to maintain reportede positions
• Over-optimistic accounting judgements
• Withholding key financial information from auditors.

The findings of the review have led to:

• Departure of CFO Arvind Balan, who admitted misrepresenting his qualifications
• A delay in publishing Wood’s 2024 annual accounts
• Suspension of Wood’s shares from the London Stock Exchange

In June 2025 the UK Financial Conduct Authority (FCA) launched a formal investigation into Wood, covering the period from January 2023 to November 2024.

Wood has announced a detailed remediation plan to over-hall its financial governance, including:-

• Changes to key financial roles
• External expert support for accounting standards
• Strengthening internal controls and transparency

Sidara’s takeover of Wood

On 1 September 2025, Peter Walker wrote the piece in insider.co.uk, “Wood accepts £216 million Sidara takeover”.

Wood Group has agreed to a £216 million takeover by Dubai based suiter, Sidara. Sidara has agreed to pay 30p per share to purchase Wood, after reducing a previous offer for the business. Wood’s shares were suspended from the London Stock Exchange after full year financial results due in April 2025 were delayed. In addition, Sidara has agreed to provide $450 million after Wood agreed with lenders to an extension of committed debt facilities to October 2028.

Talal Shair, CEO of Sidara, said, “This is a transformational moment for our company. This transaction allows us to strengthen client relationships, expand into new markets, and serve a broader range of global clients.”

Ken Gilmartin, CEO of Wood, said, “The acquisition by Sidara will solve our near-term liquidity challenges and strengthen the company in the longer term. In Sidara, we will have an owner that values our people, brand, and the deep client relationships we have built over the years and together we will be in a stronger position to deliver for our clients and achieve our potential.”

Wood has been selling off parts of its operations over the past year (2024 to 2025) to meet its debts. At the end of August, 2025, Wood agreed to sell off its North American transmission and distribution business in a £81.5 million deal. This deal meant that Wood significantly exceeded plans earlier in the year to secure between £111 million and £148 million through sales.

On 5 September 2025, Peter Walker wrote the article in insider.co.uk, entitled, “What went wrong with Wood?” Sidara’s acquisition is expected to be completed in the first half on 2026 and the purchaser’s plans for Wood to become its energy and materials division. Wood will continue to operate as a standalone business with its own brand and strategy, while benefitting from Sidara’s global scale and long term strategic owner-operator mindset.

The deal announcement noted that Wood had not generated any sustainable free cash flow since 2017 (presumably when Amec Foster Wheeler was acquired), with total free cash outflow from then to 2024 of approximately $1.5 billion, reflecting multiple issues including regulatory fines, significant loss making contracts, restructuring charges and litigation payments.

Wood’s board stated that the current capital structure of the group is unsustainable. When taking account of cash requirements, its current indebtedness is approximately $1.6 billion with liquidity to fund ongoing operations limited.

Wood’s board noted significant challenges in accessing new sources of capital, with proposed alternatives likely generating materially less, and potentially zero, value for shareholders relative to the Sidara takeover.

Roy Franklin, Chair of Wood, said, “The recommendation of Sidara’s offer follows an extensive review of the viability of all available options and it is the unanimous option for all stakeholders, whilst delivering some value for our shareholders after what has been a very difficult few years for the company.”

Franklin, who planned to leave Wood once its future direction was clear, is intending to leave following a court meeting on 7 January 2026, when shareholders vote on the acquisition.

Wood has been left with a large debt pile since taking over rival Amec Foster Wheeler for £2.2 billion in 2017, which also saw it face legacy lawsuits including £92.6 million on settlement for a damage claim in 2016.

Wood took on the assets when it bought Amec Foster Wheeler, but also the debt, with the result that net debt at Wood was $1.1 billion at the end of 2017, against $331 million in 2016.

The Sidara deal is conditional on Wood publishing its delayed results and ensuring that certain debt facilities are not terminated, among other things.

Sidara’s acquisition of Wood will establish Wood as a standalone entity within the Sidara group, which aims to become a world class engineering and design group focused on energy and materials, ensuring continuity for clients and employers and creating more opportunities across the global network, rather than eliminating energy firms:-

1. Integration. Wood is envisioned to operate as a standalone business under its own brand, maintaining its relationships and culture.
2. Focus on energy and materials. The goal for the combined entity is to take a leading role in the energy and material sectors, with Sidara’s financial support and global scale enhancing Wood’s capabilities.
3. Benefits for Wood. Wood’s employees and clients will benefit from greater stability and new, global opportunities, leveraging Sidara’s extensive global footprint and long-term vision. Some of Wood’s clients include BP, Shell, Exxon Mobil, Petroleum Development Oman, and ADNOC.
4. Continued operations. The acquisition aims to strengthen the combined group’s commercial position and ensure continued delivery for clients, indicating an ongoing presence in the energy sector, not an exit.

Wood Group’s vision for the future

Wood Group’s vision for the future is rooted ib sustainability, resilience, and global impact. They have signed their long-term strategy with the United Nations Global Compact and the 2030 Agenda for Sustainable Development, aiming to be a leader in solving the world’s most critical challenge across energy, materials, and infrastructure:-

1. Sustainability at the core, with the three pillars being people, planet, and profit.
2. Operational reinvention. Following internal challenges, Wood is undergoing financial and cultural transformation. This will involve strengthening governance and financial controls, strengthening operations to improve margins, and rebuilding trust with stakeholders and investors.
3. Strategic partnership with Sidara. In 2025 Wood Group accepted a £216 million takeover bid from UAE based Sidara, which will inject $450 million in capital, assume $1.6 billion in debt, and position Wood as Sidara’s energy and material division, retaining its brand and global reach.
4. Vision for 2030 and beyond. Wood envisions a future where engineering and consulting drive climate resilience, digital innovation enhances infrastructure and energy systems, their global work force becomes a catalyst for positive change in communities.

Conclusion

For now, it is just a time of wait and see to ascertain whether the acquisition will actually occur. If Wood does all of the things that are stipulated by Sidara then it appears that Wood will no longer be a UK company, but one headed by the UAE.