Sumitomo Heavy Industries, an integrated manufacturer of industrial machinery, has acquired the circulating fluidised bed (CFB) boiler business from Amec Foster Wheeler, a UK-based consultancy, engineering and project management company, for $170 million.
The new entity Sumitomo SHI FW is set to become a new global leader in sustainable energy solutions.
The agreement comes as part of Amec Foster Wheeler's company-wide transformation programme, which includes the sale of non-core assets. The net proceeds of the transaction will be used to reduce net debt, said the company.
The North American aftermarket services business, originally part of GPG, is being retained and since the beginning of 2017, has been operating as part of Amec Foster Wheeler's Power & Process business.
The CFB boiler business is the largest part of Global Power Group (GPG). The remaining GPG steam generator businesses include the heat recovery steam generator and industrial boilers businesses and these are also expected to be sold during 2017, stated Amec Foster Wheeler.
The transformation programme was launched by its CEO Jon Lewis, following a company-wide review.
The core components of the transformation programme include implementing a new leaner operating model designed to be closer to projects and customers, delivering cost efficiencies across the business, a focus on improving compliance and consistency in how the business operates, refreshing the company strategy and disposing of non-core assets, it stated.
A world leader in combustion and steam generation technology, Sumitomo SHI FW will become part of the Energy and Environment Group within SHI where it will dedicate its talent, energy and quality of service on CFB and BFB steam generators and gasifiers, CFB scrubbers, metallurgical waste heat boilers and aftermarket services.
On the deal, CEO Tomas Harju-Jeanty, said: "Combining our strong Foster Wheeler heritage with Sumitomo’s world-wide recognized name and skill will create a strong brand within and outside our traditional markets."
"Sumitomo SHI FW will have a deep commitment to technology innovation. Our goal is to provide clients with sustainable value that will endure for the longer term," he added.
In addition to the sale of the CFB boiler business, Amec Foster Wheeler has already completed the sale of a number of smaller assets.
Lewis said Amec Foster Wheeler has made significant progress with the company wide transformation programme that was launched last year.
"The completion of the sale of the CFB boiler business is a milestone in this programme. We will continue to implement the programme to help better serve our customers and strengthen the company's balance sheet," he added.