US engineering giant Fluor buys Dutch Stork in €700m deal

GMT 11:10 2015 Monday ,07 December

Arab Today, arab today US engineering giant Fluor buys Dutch Stork in €700m deal

Stork provides safety and environmental services for the energy industry
The Hague - AFP

Stork, an 188-year-old Dutch energy sector services provider, announced Monday it has been bought by Fluor in a multi-million-euro deal, set to strengthen the US-based engineering and construction giant's global reach.

"Fluor and Stork announced today that Fluor has signed an agreement with UK-based private equity firm Arle Capital Partners to acquire 100 percent of Stork... for an investment of 695 million euros ($755 million)," the Utrecht-based Stork said in a joint statement with Fluor.

Stork provides safety and environmental services for the energy industry. It has been hit hard in recent times by falling oil prices and cutbacks in Dutch gas production, local media and analysts said.

In particular, Stork is battling a dip in North Sea oil prices and The Hague's decision to slow down gas production in the northern Groningen gas field, the largest in the European Union, financial daily Het Financieele Dagblad reported last month.

It was put up for potential sale in the summer by Arle Capital Partners, with the Bloomberg news agency reporting an asking price of up to 500 million euros.

In October, Stork posted  a 19.0 percent year-on-year dip in its order book, regarded as a measure of an organisations' success.  

The takeover will see Fluor -- a Fortune 500 company ranked 136th largest in the US -- strengthen its global reach and services, its chief executive David Seaton said in the statement.

"The acquisition of Stork is consistent with Fluor's goal to further enhance our integrated solutions capabilities...," Seaton said.

"Stork is highly complementary to Fluor as it gives both businesses the opportunity to market diverse services and capabilities to new customers and across new geographies," he said.

Its new combined headquarters will be based in the Netherlands, the companies said.

But Jos Versteeg, analyst at Theodoor Gilissen private bank in Amsterdam warned that the takeover may see "substantial job losses at Stork."

"Fluor is a huge company and no doubt they'll look at where they will be able to cut costs," he told AFP.

Founded in 1827, Stork operates around the world and employs some 15,000 people.

Fluor is based in Irving, Texas, and ranked top by in the engineering and construction industry's "World Most Admired Companies" by Fortune Magazine.

It employs 40,000 people in 81 countries and had a turnover of $21.5 billion in 2014.


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