An investigation into the deal by the Competition and Markets Authority (CMA) raised competition concerns in relation to the supply of engineering and construction (E&C) services and operation and maintenance (O&M) services in the UK.
As both companies are two main suppliers of E&C and O&M services, the merger will reduce the number of major players currently active in these markets from four to three.
The CMA said this raises concerns that competition from other suppliers may "not be sufficient to mitigate competition worries; and other suppliers seeking to enter the market or expand their UK presence may face significant barriers to doing so".
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To address these issues, proposals have been put forward to sell off almost all of Amec Foster Wheeler's assets which contribute to these services in its Upstream Offshore oil and gas business in the UK.
The CMA said it considers there are "reasonable grounds" to believe these undertakings, or a modified version of them, might be acceptable and a public consultation will be opened on the offer in due course.
However, it warned if the undertakings proposed are not accepted, the merger deal will be referred for an in-depth investigation.
The CMA has until 12 October to consider whether to accept the offer, with a possible deadline extension until 07 December in special circumstances.
Kate Collyer, Deputy Chief Economic Adviser and decision maker in this case, said: "It is crucial that competition is maintained in this major UK industry. We will consider the undertakings offered by Wood Group and Amec Foster Wheeler further, and carefully consult interested parties, in order to make sure that they fully address our concerns."
(LM/MH)
