Wood Group anticipates higher cost savings from Amec Foster Wheeler merger

Oil services company Wood Group has announced that cost synergies from its merger with Amec Foster Wheeler will be 36% higher than previously estimated.

The firm said in a statement that it now expects cost savings of at least £150m ($187m) per annum by the end of the third year after the merger goes through, higher than the previous estimate of £110m.

The increased savings would result from operating, corporate and administration efficiencies, it added.

"As further information and analysis becomes available, Wood Group is also confident of realising additional cost synergies that cannot be quantified for reporting at this time," the statement said.

Wood Group agreed to buy Amec Foster Wheeler for £2.2bn in March in an all-share deal.

The combined entity is valued at around £5bn, with Amec shareholders owning 44% of the merged company.

Struggling Amec had intended to launch a £500m rights issue on 21 March to improve its balance sheet, but the plan was shelved in light of Wood Group's merger offer.

Tens of thousands of people working in the North Sea oil industry have lost their jobs over the past two years due to the decline in oil prices.