Saipem, Subsea7 to merge to create 'global leader in energy services'

(Sharecast News) - Italy's Saipem said on Sunday that it has agreed to merge with Norwegian rival Subsea7 to create "a global leader in energy services". Under the terms of the deal, Subsea7 shareholders will receive 6.688 new Saipem7 shares for each share they hold. Subsea7 will distribute an extraordinary dividend for an amount equal to €450m immediately prior to completion.

The combined company will be renamed Saipem7 and will have a combined backlog of €43bn, revenue of approximately €20bn and EBITDA in excess of €2bn.

Saipem and Subsea7 shareholders will own 50% each of the share capital of the combined group.

The transaction is expected to generate annual synergies of about €300m in the third year after completion, driven by fleet optimisation, procurement, sales and marketing, and process efficiencies, the companies said.

"The management of both Saipem and Subsea7 share the conviction that there is compelling logic in creating a global leader in energy services, particularly considering the growing size of clients' projects," they said.

"Saipem and Subsea7 are highly complementary in terms of market offerings and geographies. The combination would enhance value for shareholders, and all stakeholders, both in the current market and in the long term."