Foster Wheeler AG
) recently announced that its subsidiary will be acquiring South
Africa-based mining company, MDM Engineering Group Ltd. for
approximately $109 million.
Foster Wheeler's indirect wholly-owned subsidiary has inked a
merger implementation contract (MIA) with MDM Engineering.
According to the MIA, Foster Wheeler is entailed to acquire all
the common shares and options issued by MDM Engineering after
obtaining approval from the latter's investors.
MDM Engineering is a process engineering and project
management company that conducts feasibility studies for mineral
and metal processing plants, along with providing core services
including designing, construction and development of the
This deal comes after Foster Wheeler's recent announcement of
its acquisition by AMEC plc on Feb 13. As per the agreement, AMEC
will be acquiring all the issued and to-be-issued share capital
of Foster Wheeler in the second half of this year for about $3.3
billion or $32.69 per share.
Foster Wheeler has been a market leader in the mid-stream and
down-stream oil and gas industry, which gave it a competitive
edge. However, the company was finding it difficult to meet the
rising demand for capacity additions, especially in the mining
industry in a number of developing countries.
While AMEC has expertise in the upstream exploration, MDM
Engineering specializes in the mineral and metal industry. These
two companies will aptly complement Foster Wheeler's strengths to
drive both the top and bottom lines. These companies will also
aid Foster Wheeler's long-term objective of expansion across
diverse sectors like upstream, minerals and metals.
Foster Wheeler currently has a Zacks Rank #3 (Hold). Some
better-ranked players in the engineering and heavy industry
AECOM Technology Corp.
Quanta Services, Inc.
). All three stocks carry a Zacks Rank #2 (Buy).
AECOM TECH CORP (ACM): Free Stock Analysis
FOSTER WHELR AG (FWLT): Free Stock Analysis
QUANTA SERVICES (PWR): Free Stock Analysis
VSE CORP (VSEC): Free Stock Analysis Report
To read this article on Zacks.com click here.