Oil companies Technip and FMC Technologies to merge in $13-bn all-stock deal
19 May 2016
Technip SA, Europe's second-biggest oil services company and US-based FMC Technologies, today said that they would merge in a $13-billion all-stock deal to create one of the world's top companies in the sector with combined revenue of $20 billion.
The new company to be called TechnipFMC and to be listed on the Paris and New York Stock Exchanges, will have a market cap of $13 billion and generate annual sales of around $20 billion.
Under the terms of the deal, each Technip share will be converted into two shares of TechnipFMC, and each FMC Technologies share will be exchanged for one share of TechnipFMC.
Post closing, shareholders of both companies will hold close to 50 per cent of TechnipFMC.
Technip, based in Paris, has a market cap of about $6.2 billion and annual revenue of $13.5 billion, while Houston-based FMC Technologies has a market value of $6.5 billion and annual sales of around $6.36 billion.
The merger will allow the companies to cut costs by $400 million annually from 2019, and have an order backlog of $20 billion.
Both companies said that the merged company will offer a new generation of comprehensive solutions in subsea, surface and onshore / offshore to reduce the cost of producing and transforming hydrocarbons.
John Gremp, chairman and CEO 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."
Thierry Pilenko, Technip chairman and CEO, said, "We have complementary skills, technologies and capabilities which our customers can access on an integrated basis or separately as they prefer."
Technip is a world leader in project management, engineering and construction for the energy industry.
It employs around 32,500 people and is present in 45 countries, while FMC Technologies has approximately 16,500 employees and operates 29 major production facilities and services bases in 18 countries.