Saipem to Merge with Subsea7, Creating Energy Services Giant
Deal News | Feb 23, 2025 | Globenewswire
Saipem and Subsea7 have agreed on the principal terms of a merger, forming a major entity in energy services, called Saipem7. The merger, outlined via a memorandum of understanding, aims to leverage a combined backlog of €43 billion and approximate revenue of €20 billion, with expected annual synergies of €300 million from the third year post-completion. Each company's shareholders will hold 50% of Saipem7, while Subsea7 shareholders are to receive new Saipem shares alongside a €450 million extraordinary dividend. Key supporters including Siem Industries, Eni, and CDP Equity back this combination, which will be listed on Milan and Oslo stock exchanges. The strategic merger enhances service offerings in onshore and offshore developments, embracing technologies to support the energy transition. In operational structure, CDP Equity and Eni will appoint the CEO, while the offshore division will be led by a dedicated entity under John Evans. The plan also includes a dividend policy post-completion, distributing at least 40% of free cash flow. The transaction requires customary approvals, aiming for completion by the second half of 2026.
Sectors
- Energy Services
- Offshore Engineering
Geography
- Italy – Saipem is headquartered in Milan, Italy, and the article discusses the proposed merger which involves Italian regulatory approval.
- Norway – Subsea7 has significant operations in Norway, and the combined entity will have listings on the Oslo stock exchange, highlighting Norwegian involvement.
Industry
- Energy Services – The article discusses the merger of Saipem and Subsea7, both of which are prominent in the energy services sector, offering engineering and construction services required for energy projects.
- Offshore Engineering – Both companies provide significant offshore engineering services, including offshore drilling and construction, making this sector integral to their operations.
Financials
- 43 billion – Combined backlog as of 30 September 2024
- 20 billion – Combined revenue over the last 12 months as of 30 September 2024
- 2 billion – Combined EBITDA over the last 12 months as of 30 September 2024
- 450 million – Extraordinary dividend distributed by Subsea7 shareholders prior to merger completion
- 300 million – Expected annual synergies from the third year post-completion
- 270 million – One-off costs to achieve synergies
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Saipem | Target Company | Company | An Italian oilfield services company involved in engineering, construction, and project management of energy infrastructure. |
| Subsea7 | Target Company | Company | A global leader delivering offshore projects and services for the energy industry, based in Luxembourg. |
| Siem Industries | Reference Shareholder | Company | A reference shareholder of Subsea7 supporting the merger. |
| Eni | Reference Shareholder | Company | A major Italian energy company and reference shareholder of Saipem. |
| CDP Equity | Reference Shareholder | Company | An Italian investment company, serving as a reference shareholder of Saipem. |
| Goldman Sachs International | Lead Financial Advisor to Saipem | Company | Providing financial advisory services for the merger to Saipem. |
| Deutsche Bank AG | Financial Advisor to Saipem | Company | Advising Saipem as part of the financial transaction team. |
| Clifford Chance LLP | Legal Counsel for Saipem | Company | Acting as global legal counsel for Saipem concerning the merger across jurisdictions. |
| Advokatfirmaet Thommessen AS | Legal Counsel for Saipem | Company | Providing legal advisory for Norwegian law for Saipem. |
| Kirk Lovegrove & Company Limited | Lead Financial Advisor to Subsea7 | Company | Advising Subsea7 on financial matters for the merger. |
| Deloitte LLP | Financial Advisor to Subsea7 | Company | Providing financial advisory services for Subsea7 in the merger. |
| Freshfields LLP | Legal Counsel for Subsea7 | Company | Global legal counselor for Subsea7 during the merger process. |
| Elvinger Hoss Prussen S.A. | Legal Counsel for Subsea7 | Company | Advising Subsea7 on Luxembourg legal matters in the merger. |
| Advokatfirmaet Wiersholm AS | Legal Counsel for Subsea7 | Company | Providing legal advice to Subsea7 on Norwegian law. |
| Alessandro Puliti | Envisaged CEO of Combined Company | Person | Proposed CEO for the new entity Saipem7 following the merger. |
| John Evans | CEO of Offshore Business | Person | Current CEO of Subsea7 and envisaged leader of the Offshore business post-merger. |