Offshore Engineering Mega-Merger in Offshore-Engineering: Technip and FMC Join forces
Tight margins and an all-time price slump tighten the noose on offshore oil. Especially engineering projects are affected by this ongoing crisis – Now Technip of France and US-based FMC Technologies plan to join forces in a fusion of equals.
French offshore engineering specialist Technip and FMC Technologies (Houston, Texas/USA), a service and technology provider for oil and energy projects, plan a 13-billion-dollar fusion of equals. Together, both companies would account for an annual revenue of US $ 20 billion and EBIDTA of 2.4 billion (as of 2015).
The new company called Technip FMC will be listed at the stockj exchanges of both Paris and New York. Under the terms of the agreement, Technip shareholders will receive two shares of the new company for each share of Technip, and FMC Technologies shareholders will receive one share of the new company for each share of FMC. Each company's shareholders will own close to 50 percent of the combined company.
Offshore Engineering Specialists Technip and FMC Plan Fusion to Overcome Crisis
Using technology and service synergies, the two firms hope to save up to US $ 400 million per year due to synergetic effects. Technip FMC shall offer a new generation of comprehensive solutions in Subsea, Surface and Onshore/Offshore to reduce the cost of producing and transforming hydrocarbons, company speakers stated. Together, the two partners employ around than 49,000 people in over 45 countries. As of March 31, the two companies together had consolidated backlog of approximately $20 billion.
John Gremp, Chairman and Chief Executive Officer of FMC Technologies, said, "This is a compelling combination that will create significant additional value for clients and all shareholders, by expanding the success that FMC Technologies and Technip have achieved through our alliance and joint venture, to capitalize on new opportunities and drive accelerated growth." It is not the first cooperation of the two offshore experts: In 2015, Technip and FMC launched the joint venture company Forsys Subsea which shall now serve as a model for the fusion.
Thierry Pilenko, Technip Chairman and Chief Executive Officer, who will serve as Executive Chairman of Technip FMC, stated, "Technip and FMC both have long track records of innovation and commitment to helping their clients meet the challenges of the oil and gas industry. A year ago, we were at the forefront of recognizing the importance of a broader view of our clients' challenges and seized the opportunity that working together in our alliance could bring. Today we want to take this strategy further and across the full footprint of the two companies. We have complementary skills, technologies and capabilities which our customers can access on an integrated basis or separately as they prefer. Together, Technip FMC can add more value across Subsea, Surface and Onshore/Offshore, enabling us to accelerate our growth. I am confident that we can quickly demonstrate the power of Technip FMC to our clients, our people and our shareholders."