In a combined share and cash deal, UK Engineering group AMEC has signed a definitive agreement to take over Swiss-based competitor Foster Wheeler. The transaction is expected to close in the second half of 2014.

The AMEC offer is calculated to be worth $3.3 billion, slightly higher than the non-binding offer floated last month. A successful takeover could create a chemical and energy engineering giant with revenues of up to $10 billion and an order backlog of similar scale, reports said. Foster Wheeler shareholders stand to own about 23% of the combined company.

AMEC is said to be particularly interested in Foster Wheeler's regional presence in South America and the Middle East as well as Australia, a geographical spread that would complement the British group's strengths in Europe and North America.

Foster Wheeler, which has its operational headquarters at Reading, UK, but also roots in the U.S., is specialized in mid- and downstream chemical and petrochemical projects. One special drawing card, observers say, is AMEC's desire to become more involved in the shale gas sector.

The multinational engineering contractor is currently engaged in a liquefied natural gas (LNG) project in Australia's Pluto gas fields, where it reportedly has encountered problems with front-end design. The company additionally has been faced with legal complaints from workers exposed to asbestos.

In a conference call to provide details of the proposed deal, AMEC identified potential cost savings of around $75 million from the operations merger.  However, it did not detail where the savings would come from.

The merged company could be expected to have a strong position in the offshore and onshore oil and gas sector, as well as in gas monetization, refining and chemicals, minerals and metals, power and clean energy, environment & infrastructure and pharmaceuticals.

On a pro forma basis, the workforce would total more than 40,000, although analysts say that to avoid duplication there are likely to be redundancies.