Saipem and Subsea7 have reached an agreement in principle on the key terms of a possible merger through the execution of a memorandum of understanding (MoU). The combination of the two companies will create a global leader in energy services.
The combination of Saipem and Subsea7 will be renamed Saipem7, and will have a combined backlog of EUR 43 billion, revenue of approximately EUR 20 billion and EBITDA in excess of EUR 2 billion. The company will employ over 45,000 people, including more than 9000 engineers and project managers.
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Highly complementary
The companies see each other as highly complementary in terms of geographical footprints, competencies and capabilities, vessel fleets and technologies. Saipem and Subsea7 shareholders will own fifty per cent each of the share capital of the combined company that will be listed on both the Milan and Oslo stock exchange.
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. The combination would enhance value for shareholders, and all stakeholders, both in the current market and in the long term.
Reference shareholders support merger
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. Alessandro Puliti is expected to become CEO of Saipem7, while it is currently envisaged that John Evans will be the CEO of the entity that will manage the Offshore business of the new company. Such Offshore business will comprise all of Subsea7 and Saipem’s Offshore Engineering & Construction activities.
The new company would be created by way of an EU cross-border statutory merger carried out by way of incorporation of Subsea 7 into Saipem, with the latter to be renamed Saipem7. Saipem7 will be headquartered in Milan and have its shares listed on both the Milan and the Oslo stock exchanges.
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Offshore business continues as Subsea7
Saipem7 will be structured in 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 will comprise all of Subsea7’s business and the Asset Based Services business of Saipem, representing approximately 83 per cent of the combined group’s EBITDA of the last twelve months as of 30 September 2024. This company will be headquartered in London.
In line with Saipem’s previous strategy, the Onshore Engineering & Construction will be run with a focus on reducing overall risk and maximising profitability. The Sustainable Infrastructures business will aim to consolidate its presence in the Italian market with potential expansion overseas. The Offshore Drilling division will seek to continue to maximise its EBITDA and cash flow.
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Timing and approvals
The entering into and signing of binding definitive documents in respect of the merger is conditional, inter alia, on the successful completion of confirmatory due diligence by the parties, the execution of a mutually satisfactory merger agreement and the approval of the final terms of the merger by the Board of Directors of Saipem and Subsea7.
The parties will also engage with the relevant works council consultations required by the applicable laws. Completion of the merger will also be subject to customary regulatory approval.
Completion of the merger is anticipated for the second half of 2026.
Picture: Subsea7’s Seven Borealis (photo by Kees Torn, Flickr, cc-by-sa-2.0).
