Italian offshore oil and gas engineering, procurement and construction (EPC) contractor Saipem and UK-based offshore engineering and services player Subsea7 have reached an agreement in principle on the key terms of a possible merger of the two companies The combination of Saipem and Subsea7 will be completed by way of an EU cross-border statutory merger incorporating Subsea7 into Saipem, with the latter to be renamed Saipem7. The merger deal is estimated to be valued at $4.6bn. The new entity will have a combined backlog of €43bn ($45.2bn) and revenue of about €20bn ($21bn). According to a memorandum of understanding signed by the two companies, Saipem and Subsea7 shareholders will own 50% each of the share capital of the combined company. Subsea7 shareholders will receive 6.688 Saipem shares for each Subsea7 share held. Oslo-listed Subsea7 will distribute an extraordinary dividend for an amount equal to €450m ($473m) immediately before completion. Post-completion, Saipem7 is expected to pay a dividend of at least 40% of free cash flow after repayment of lease liabilities. The new company will be headquartered in Milan and listed on both the Milan and Oslo stock exchanges, with completion set to occur in the second half of 2026. The parties will submit the final terms of the proposed combination to their respective boards for approval, and are expected to enter into a merger agreement in mid-2025. After the merger is completed, Siem Industries, the largest shareholder of Subsea 7, will own approximately 11.9% of the combined company’s capital, while Italian energy major Eni and CDP Equity – the largest shareholders of Saipem – will own 10.6% and 6.4%, respectively. CDP Equity, Eni and Siem Industries have entered into a separate memorandum of understanding to support the merger and agree on the terms of a shareholders agreement, to be effective from the completion of the proposed combination. As part of this, the chairman of Saipem7 will be designated by Siem Industries and the CEO will be designated by CDP Equity and Eni – this role will most likely fall to Alessandro Puliti, the CEO of Saipem. Saipem7 will be structured into four businesses – offshore engineering and construction, onshore engineering and construction, sustainable infrastructures and offshore drilling. The offshore engineering and construction business will be incorporated into an operationally autonomous company branded as 'Subsea 7 – a Saipem7 company'. It is expected that this business unit will be led by John Evans, CEO of Subsea7. It will comprise all of Subsea7’s business and the asset-based services of Saipem, representing approximately 83% of the combined group’s earnings before interest, taxes, depreciation and amortisation (ebitda) of the 12 months upto 30 September 2024. The company will be headquartered in London. When merged, the new company will be a global organisation of over 45,000 people, including more than 9,000 engineers and project managers in more than 60 countries. (ICE RIYADH)

Fonte notizia: Meed