One of Australia’s biggest engineering companies has been named as the potential buyer for a Canadian engineering giant, even though the Canadian outfit in question could yet be bankrupted by legal proceedings against it in relation to alleged bribery and corruption.
Canadian media reports have suggested that Sydney-based Worley Parsons is one of at least two large multi-national outfits said to be weighing up a possible takeover of beleaguered Canadian engineering and construction giant SNC-Lavalin.
“People are circling. It’s a big prize. It’s worth having,” one source close to the negotiations was quoted as saying in Canada’s Financial Post, while another said acquirers had “shown up at the door.”
Based in Montreal, SNC-Lavalin has more than 40,000 workers across more than 50 countries and specialises in engineering, procurement, construction and maintenance work.
The company has been in trouble in recent years, however, due to allegations of multi-million dollar bribery offences.
In February, the Royal Canadian Mounted Police laid two corruption charges against the group and two of its subsidiaries over alleged criminal acts which occurred while the firm was doing business in Libya. One of the charges related to at least $47.7 million in alleged bribes to Libyan public or other officials and the other related to alleged fraud of about $130 million related to construction projects in Libya, including the Great Man Made River Project.
The company’s current chief executive officer Robert Card has acknowledged that any criminal connections could be fatal to the company as it is heavily dependent upon government contracts in Canada and a conviction could also hamper its ability to win international work.
Card has acknowledged SNC would become susceptible to a takeover.
Hit by the resources slowdown, meanwhile, Australia’s Worley said in May it would slash 2,000 jobs around the world as it restructures its business.
Through the company has declined to comment on the current speculation, its chief executive officer Andrew Wood has previously signalled that the company is on the lookout for acquisitions in order to boost growth.
Still, apart from the legal proceedings, a further obstacle is that SNC-Lavalin – which has a market capitalisation of more than $7 billion ($A7.3 billion), is almost three times the size of Worley ($2.5 billion).
Apart from Worley, the other party said to be interested is Spanish giant ACS, which owns Australian engineering group CIMIC (formerly known as Leighton Holdings).