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In reference to the recent post, conditions influencing the UK shouldn't make too much difference to Merlin as it aims to diversify its revenue fairly evenly between Europe, the States, and Asia.

I've been writing posts on here for a long time saying that Amec FW is a good company. Today, apart from the takeover, Amec announced that they had won a contract in the middle east - this is leveraging off Foster Wheeler's reputation in the middle east. As the industry gets busier this will help Amec to win more win. Amec FW in itself had strong engineering capabilities. With regard to the fascinating Wood Group takeover, this creates an industry giant. In Aberdeen especially the firm will loom massively : must have around 90% of the engineering in Aberdeen. Secondly, this finally gives Wood Group a serious base in London (they had a small one through the acquisition of Mustang - Woking office - a few years back but that was not one of the major London area offices. The most prestigious in the industry were: Amec, KBR Leatherhead, and CBI and Worley Parsons, Brentford. Like some of the other giants of the industry – Worley Parsons and Technip – WoodGroup has grown very intelligently through acquisition of smaller but prestigious firms and seems to have better management than Amec. There are some good synergies. Amec London is a greenfield specialist like WoodGroup's Norwegian office (formally Agility, and before that Grenland) which is on the east coast of Norway where the work is mainly greenfield. StatOil, who award most of the work for Norway, always wanted a rival to Aker (the giant in Norway) and Aibel (second biggest contractor there) - now with this acquisition the Amec/ wood Group group may be able to tap this lucrative market.

It's been a great run of upward momentum for the share price of AMFW recently. I still feel that there is a lot more to come, not just now but in the years to come. One of the reasons is that the oil price is still at a fairly low level with no great talk of it hitting a higher level for some time. AMFW is able to maintain the core of its engineering staff and departments in spite of this because it operates well beyond oil and gas in other sectors. Many of its great rivals in London (there are under 10 major engineering offices in London and Amec was probably in the top 4 anyway) - are having to dispense of staff. At a certain point, key skills, practices and capabilities of the organisations may be lost. So when the oil price recovers more, amec may be able to better compete to win major detailed engineering work.

Given the company's strength in its sector - a sector almost certain to grow in the future - and it's incredibly strong balance sheet, I'm wondering if there's a better share to hold for income alone.

Even though the shares of Amec Foster Wheeler have risen sharply in recent weeks - there should be much greater growth to come in the next two years. As Harry65 says the company seems to have drawn a line under bad news. It is the good news likely to come which should encourage investors to be bulish in the medium- to long term. Amec acquired Foster Wheeler in January 2014 - when the industry was quiet. We have therefore yet to see the engineering benefits, which should help Amec FW when the market picks up (as indications seem to suggest for oil for the second half of this year). The benefits are that by acquiring FW, Amec can now operate across the full engineering spectrum - from upstream to downstream - and it's one of the few big players who can. Foster Wheeler also has a good name in the onshore world, in the middle east, and the states. Additionally, by acquiring Foster Wheeler, Amec has acquired an Indian office - essential in modern engineering. So there are many reasons to be cheerful as amec won work in the past against its rivals, and now is a much more impressive company. It's fundamentals are strong too.

It seems to me that the recent drop in the share price represents a great buying opportunity. Many brokers still have targets of around £6 a share, and the company has had a very reassuring start to 2016 with over 5 contract wins, especially outside of oil and gas, of which Amec Foster Wheeler has many interests beyond. With a recent change in CEO, the company should prove a very decent long term investment

Whilst it is clear that the oil and gas industry is in some difficulty, the battering that Amec has endured seems overdone. This is a very well-run engineering company, with many excellent features. It is one of the top 5 engineering offices in London and one of the top 2 in Aberdeen. The acquisition of Foster Wheeler in February provides long term strengthening of Amec’s capabilities. Overnight, the Foster Wheeler acquisition made AMFW one of the only contractors to truly operate across the whole engineering spectrum, from downstream to upstream – it also made Amec a heavyweight player in the middle east, where Foster Wheeler is a prestigious name. Like KBR beforehand who bought out MW Kelloggs which was based in expensive Greenford and closed the London office, relocating all engineering to the Leatherhead KBR office, Amec has closed its Old street office, and rerouted engineering to Reading – saving money, but also with a s****y management office in London Wall. The FW purchase also gave Amec an Indian office – and a portion of all future work will be done there. Whilst the Greenfield work carried out in London will be unlikely to flourish in 2016, the Brownfield (maintenance work) office performed by Aberdeen is likely to pick up in 2016 as for HSE reasons, platforms need to be regularly maintained. There was a recent win of a contract by Aker solutions of a BP maintenance job and it is likely that more contracts will be available. As Amec is an Aberdeen heavyweight (one of 2) it is likely that Amec will enjoy a better year next year from oil revenues. The company also is diversified beyond O&G, and has had recent successes in nuclear for example. The company has strong, stable management and a good foundation to do better next year than this year, and very good prospects beyond. It seems to be chronically undervalued.