Technip and FMC Technologies to mergeCompany News // May 19, 2016
Technip and FMC Technologies have announced that they are to merge and create a new subsea, surface and onshore/offshore company. The combined company will be called TechnipFMC and has combined 2015 revenue of US$20 billion and EBITDA of US$2.4 billion, along with a US$20 billion backlog as of 31 March 2016.
The transaction is expected to deliver at least US$400 million in annual pretax cost synergies in 2019 and create a company with one of the strongest balance sheets in the industry.
“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,” said the companies in a statement.
The companies aid the deal would "drive change by redefining the production and transformation of oil and gas" and have entered into a Memorandum of Understanding (MOU) and expect to execute a definitive business combination agreement to combine the companies in an all-stock merger transaction.
The transaction brings together two market leaders and their employees, building on the proven success of their existing alliance and joint venture, Forsys Subsea, uniting innovative technologies, common cultures and values, enabling rapid integration.
"The combined company will offer a new generation of comprehensive solutions in subsea, surface and onshore/offshore to reduce the cost of producing hydrocarbons," said Technip.
John Gremp, Chairman and Chief Executive Officer of FMC Technologies, said the merger would create significant additional value for clients and all shareholders, 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 Chief Executive Officer, who will serve as Executive Chairman of TechnipFMC, said: "Technip and FMC Technologies 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, TechnipFMC 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 TechnipFMC to our clients, our people and our shareholders.”