Subsea7, Saipem agree terms for merger plan unveiled in February

The companies said the merger between them will create a global leader in energy services. The company will be renamed Saipem7 and have revenue of approximately €21Bn (US$25Bn), EBITDA in excess of €2Bn, will generate more than €800M of free cash flow and will have a combined backlog of €43Bn.

They will have ‘highly complementary’ geographical footprints, competencies and capabilities, vessel fleets and technologies that will benefit Saipem7’s global portfolio of clients.

On completion, Saipem and Subsea7 shareholders will own 50% each of the share capital of Saipem7. Subsea7 shareholders participating to the proposed combination will receive 6.688 new Saipem shares for each Subsea7 share held. Subsea7 will distribute an extraordinary dividend to its shareholders for an amount equal to €450M immediately prior to completion of the proposed combination.

Annual synergies arising from the merger are expected to be approximately €300M on a run-rate basis, which will lead to material value creation for the shareholders of Saipem7.

Saipem7 will remain incorporated in Italy and headquartered in Milan, and will have its shares listed on both the Milan and Oslo stock exchanges. Siem Industries, a reference shareholder in Subsea7, and Eni and CDP Equity, reference shareholders in Saipem, have committed to vote in favour of the merger.

To ensure a balanced leadership and governance structure, Saipem7’s chief executive will be designated by Eni and CDP Equity and Saipem7’s chairman will be designated by Siem Industries. It is currently envisaged that, on completion of the merger, Kristian Siem will be appointed as chairman of Saipem7 and Alessandro Puliti will be appointed as chief executive of Saipem7.

In addition, Alessandro Puliti and John Evans will be appointed respectively as the chairman and chief executive of the company that will manage the offshore engineering and construction business of Saipem7. This company will be named Subsea7, branded as ‘Subsea7, a Saipem7 Company,’ and will include all of Subsea7’s businesses and Saipem’s asset-based services business, including offshore wind.