AMEC signs framework agreement to support Vattenfall in the UK renewables market; divests UK Wind Developments
06 October 2008
London, United Kingdom (6 October 2008) - AMEC plc, the international engineering and project management company, today announces that it has signed a framework agreement in the UK wind energy market with Swedish company Vattenfall. In a related transaction, AMEC’s UK Wind developments business (AMEC Wind) has today been sold to Vattenfall for a total cash consideration of £126.6 million. The sale excludes AMEC’s interest in the Lewis development.
Vattenfall is Europe’s fifth largest generator of electricity and the largest producer of heat, and works in all parts of the electricity value chain. In the UK wind energy sector, Vattenfall already owns and operates the 90MW Kentish Flats offshore wind farm and has recently announced an offer to acquire Eclipse Energy, which is developing several projects with an aggregate potential capacity of over 200MW. Vattenfall sees the UK as a key market for growth, with the acquisition of AMEC Wind representing a logical step in the development of its position in the UK renewables market.
AMEC and Vattenfall have entered into a framework agreement to complement each other’s skills and resources in the UK market for wind energy relating to the acquired portfolio. AMEC will also be asked to provide specialist consultancy, engineering and project management services to Vattenfall's onshore and offshore wind powered electricity generation projects in the UK.
Beyond the framework agreement, AMEC and Vattenfall have agreed to collaborate by way of a strategic alliance in the development of energy projects in the UK and to utilise their respective complementary skills and resources to assess and maximise opportunities. Vattenfall is working actively on reducing CO2 emissions from its own operations, with a target of cutting its emissions in half, and is strongly engaged in international climate work.
AMEC shares Vattenfall’s vision of reducing carbon emissions and generating energy more efficiently and will provide Vattenfall with specialist consultancy, engineering and project management services in support of its strategic goals.
Divestment of the UK Wind Developments business
AMEC Wind has been sold to Vattenfall for a total cash consideration of £126.6 million, excluding AMEC’s retained interest in the Lewis development. The divestment follows a strategic review of AMEC’s position in the wind market which identified greater potential for AMEC in the delivery of wind farms than in their development. AMEC already has a leading position in the delivery of wind farms in Canada and sees opportunities to expand this further in other parts of the world.
AMEC Wind was established some eight years ago to develop a portfolio of potential sites for on- and off-shore wind farms. The portfolio which has been sold consists of one site under construction (29.9MW) and eight sites which are at varying stages in the planning process with an aggregate potential net generating capacity of over 540MW.
The management team is remaining with the business being sold to Vattenfall. For the year ended 31 December 2007, AMEC Wind generated a loss of £6.2 million before interest, tax, intangible amortisation and exceptional items. Gross assets as at 31 December 2007 were £0.3 million.
Proceeds from the transaction will be held on deposit.
Samir Brikho, AMEC Chief Executive said:
“This is an excellent deal for both AMEC and Vattenfall. We are delighted to be working with Vattenfall as they build their position in the UK wind energy market. This is an area of national importance and together we look forward to making a significant contribution towards the UK’s targets for energy from renewable sources.
“Today’s announcement is further recognition of AMEC’s leading expertise in energy, power and process markets and follows the announcement of our strategic alliance with BP, and the selection of our consortium to manage the nuclear decommissioning at Sellafield. Through our specialist expertise in all areas of power generation, I believe we can make a significant contribution to the achievement of Vattenfall’s strategic goal of becoming the world’s most environmentally friendly energy company.”
Lars G Josefsson, Chief Executive Officer of the Vattenfall Group, said:
“AMEC is one of the most respected and experienced engineering services companies in the utility sector, whose skills and resources in wind energy are complementary to our own.
“Vattenfall has ambitious plans within the renewable energy sector and we are delighted that AMEC’s UK Wind Developments business will be a part of our growing portfolio.”
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