The merger agreement deepens an existing alliance between Technip of France
Paris - AFP
Oil and gas services companies Technip of France and American peer FMC Technologies said Thursday they have agreed to merge, creating one of the world's top companies in the sector.
"The companies will combine to create a global leader that will drive change by redefining the production and transformation of oil and gas," they said.
The new company, called TechnipFMC, will be worth $13 billion (11.6 billion euros) and generate sales of around $20 billion.
By comparison, this is around half of the revenues posted by global sector leader Schlumberger, with the tie-up likely to propel the combined group into the top five oil services providers in the world.
Its shares are to be listed in New York and Paris.
The merger deepens an existing alliance between both companies and is to generate "at least" $400 million in annual savings from synergies within three years.
Both Technip and FMC provide project management, engineering and construction for the energy sector, with FMC also specialising in subsea systems. Together, they employ around 49,000 people.
"The combined company will offer a new generation of comprehensive solutions in subsea, surface and onshore/offshore to reduce the cost of producing and transforming hydrocarbons," they said.
No cash will change hands. Technip shareholders are to receive two shares in the new company for each Technip share, and the conversion rate for FMC shareholders will be one for one.
The operation will "significantly" increase earnings per share for both sets of stockholders, they said.
The new company will be registered in Britain with operational headquarters in Paris.
The merger was unanimously agreed by the directors of both companies and is to close next year, subject to shareholder and regulatory approval.
The announcement sent Technip shares soaring on the Paris stock exchange, where they were trading 13.5 percent higher at 52.65 euros in an overall weaker market.