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    CGGVeritas acquires Fugro's geoscience division

    News // September 24, 2012

    CGGVeritas has entered into an agreement with Fugro to the company's geoscience division, excluding the existing multi-client library and nodes businesses.

    "With this transformative agreement, CGGVeritas will become a fully integrated geoscience company, establishing a leading position in the fast growing high-end integrated geology and geophysics and reservoir market," said CGGVeritas.

    "The transaction will also strengthen and extend our existing equipment and acquisition businesses, in particular with the addition of four high-end 3D vessels."

    The agreement also includes strategic partnerships which will benefit from the leading positions both parties have in their respective markets.

    These include:

    • The creation of a Seabed Joint-Venture, a focused global leader in the rapidly growing Seabed acquisition market, which will be 60 per cent owned by Fugro after payment of €225 million to CGGVeritas.
    • A commercial agreement for CGGVeritas to sell Fugro’s existing multi-client data, which remains owned by Fugro.
    • A global strategic technical and commercial mutual preferred supplier agreement.

    "The gross amount of the transaction is €1.2 billion, to be paid in cash and expected to be financed with 1/3 of equity and 2/3 from debt and Seabed JV share proceeds," said CGGVeritas, "structured to maintain our current credit ratings."

    As soon as possible, CGGVeritas intends to launch a capital increase with a rights issue. The debt will be financed by a bridging loan. The transaction is expected to be accretive from 2013 and enable steadier cash generation from the integrated Group. The transaction has been approved by the boards of CGGVeritas and Fugro.

    The completion of the transaction is subject to mandatory anti-trust clearances, work councils consultation processes and other customary conditions. Closing is targeted
    before year-end.

    Jean-Georges Malcor, Chief Executive Officer of CGGVeritas said: “I am very enthusiastic about the transaction. It perfectly fits our strategy, significantly increasing our integrated geology and geophysics, reservoir characterization and development capabilities, along with strengthening our core equipment and acquisition offer in particular with immediate access in marine to high end vessels at a time of market recovery.

    "It also extends our service range to new customers and additional markets such as airborne. The acquired business of Fugro’s geoscience division fully complements our products and services and enables us to better serve our clients across the complete exploration to production value chain.

    "Fugro’s technology and talented people are an excellent addition to our team and I look forward to welcoming them to CGGVeritas. With an expanded technology portfolio, a stronger industry position and our combined expertise, we will create an integrated company with leading capabilities in geoscience, equipment, and acquisition.

    "Moreover, the agreement creates a strategic partnership that combines the strengths of CGGVeritas and Fugro, including the establishment of a new seabed acquisition joint venture that immediately becomes a focused market leader in this very promising and dynamic market segment.

    "This step change transaction is expected to accelerate profitable growth, cash generation and increase the resiliency of the business. The proposed financing structure will enable our shareholders to fully benefit from this transaction which is expected to be accretive from 2013.

    "Transformed into an integrated Geoscience company, CGGVeritas will be well positioned to deliver greater value to our clients and shareholders and provide more opportunities for our employees.”


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