Saipem and Subsea7 have reached an agreement in principle on the key terms of a possible merger of the two companies.
The companies have signed a memorandum of understanding (MoU) regarding the possible 50:50 merger, which aims to create a “global leader in energy services”.
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, with themerger expected to complete in the second half of 2026.
It will be a global organisation with over 45,000 staff, including more than 9000 engineers and project managers.
The merged company will be structured into four businesses: Offshore Engineering & Construction, Onshore Engineering & Construction, Sustainable Infrastructures and Offshore Drilling.
The Offshore Engineering & Construction business will be incorporated in an operationally autonomous company, named Subsea7 and branded as “Subsea7 – a Saipem7 Company”.
It is envisaged that it will be led by John Evans.
It will comprise all of Subsea7’s business and the Asset Based Services business of Saipem, representing approximately 83% of the combined group’s EBITDA of the last 12 months as of 30 September 2024.
The company will be headquartered in London.
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.
Highly complementary geographical footprints, competencies and capabilities, vessel fleets and technologies will benefit Saipem7’s global client base, stated the companies.
Saipem and Subsea7 shareholders will own 50% each of the share capital of the Combined Company.
The companies said they expect “annual synergies” of approximately €300m in the third year after completion, with one-off costs to achieve such synergies of approximately €270m.
The merged company will be listed on both the Milan and Oslo stock exchanges.
Siem Industries, reference shareholder of Subsea7, as well as Eni and CDP Equity, reference shareholders of Saipem, have expressed their strong support and intend to vote in favour of the transaction.
CDP Equity, Eni and Siem Industries have entered into a separate MoU, undertaking to support the proposed combination and agreeing on the terms of a shareholders agreement, to be effective from completion of the proposed combination.
It is expected that Alessandro Puliti will be appointed as CEO of the combined company.