Acergy takes over rival Subsea 7 in £1.6bn share deal
The deal will create an industry leader in undersea engineering and construction jobs for the oil and gas industry with a combined workforce of 12,000.
The consolidation comes amidst a gradual rebound of demand for offshore oil services due to higher and more stable energy prices, but with new uncertainty from the unclear regulatory environment following the recent oil spill in the Gulf of Mexico.
The companies said they expected annual synergies of at least $100 million following the deal and had an order backlog of $5.3bn.
Acergy is to take 54 per cent of the new entity and Subsea 7 will hold the remaining 46 per cent. Shareholders of Subsea 7 will receive 1.065 Acergy common shares for every Subsea 7 common share.
Subsea 7 – which also has its UK headquarters in Aberdeen and has further bases in Leith and Wick – was founded by Norwegian investor Kristian Siem, who is to become chairman of the combined entity.
The chief executive of the combined group – to be named Subsea 7 – will be Jean Cahuzac, the present Acergy chief executive.
The companies said in a joint statement: "Both boards believe that the combined entity will be better able to meet the growing size and technical complexity of subsea projects, driven by the demand to access ever more remote reserves in increasingly harsh environments."
Acergy is strongest in West Africa and Asia, where Subsea 7 has only a limited presence, while Subsea 7 is strong in the North Sea and Brazil.
Arctic Securities analyst Erik Toenn said the deal would transform the combined group into "the world's leading subsea player".
He added: "This makes much sense in every possible way."
The deal is expected to be completed later this year or early next year.
The development site of Acergy's new Aberdeen headquarters was sold by builder Stewart Milne to a commercial property fund for 36m earlier this year.