WorleyParsons Ltd (ASX: WOR) officially closed the $4.5 billion acquisition of Jacobs ECR on Friday (US time) while the ASX was closed.
A Giant Company
As my colleague Max previously advised in this article, the newly formed “Worley” company will employ more than 57,000 people across 51 countries.
“This merger is about more than capacity and capability. It’s about opportunity. The opportunity to become the partner of choice for our customers, the employer of choice for our people and to deliver enhanced return for our shareholders” said CEO Andrew Wood.
The Worley business will be broken into four business units, including:
- Energy and Chemical Services
- Minerals & Metals Services and Major Projects and Integrated Solutions.
Worley said it expects to generate synergies of $130-160 million over the next two years, with further benefits achieved from optimisation and revenue strategies.
Time To buy?
The bigger a company gets, the more inefficient it can become as various departments tend to work in silos. Synergy benefits are always touted in mergers. Naturally, I’m cynical and would prefer to adopt a wait and see approach with Worley shares.
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Disclaimer: At the time of writing, Andrew does not own shares in any of the companies mentioned.