Subsea construction giants agree to merge

The boards of Acergy and Subsea 7 have agreed to combine the two companies, creating a combined global organization.

Offshore staff

LONDON -- The boards of Acergy and Subsea 7 have agreed to combine the two companies, creating a combined global organization with:

• A market value of $5.4 billion and a 12,000-strong workforce

• A full range of subsea services, serviced by a diversified fleet and extensive fabrication and onshore facilities

• An order backlog of $5.3 billion.

The new entity – to be named Subsea 7 – will be headed by Subsea 7’s current chairman, Kristian Siem. Others in the executive management team will include Jean Cahuzac as CEO, and John Evans as COO.

Assuming regulatory and shareholder approvals, the merger could be completed towards the end of this year or early in 2011.

Both companies say that by combining resources, they will be better placed to respond to the growing size and technical complexity of subsea projects, in remote and increasingly harsh environments.

The merger aims to create a global leader in seabed-to-surface engineering and construction; to provide engineering, procurement, installation, and commissioning services for Subsea Umbilical, Riser, and Flowline (SURF) projects; and to conduct conventional field development and life-of-field services (including inspection, repair and maintenance, survey, and decommissioning).

The new entity will operate a fleet of 43 vessels, with greater flexibility to optimize fleet schedules.

Within three years of the merger being effected, the boards expect to achieve annual synergies of at least $100 million through overhead and operating cost savings; more efficient supply chain management; and the benefits of a larger global fleet.

“The combined entity will have a stronger balance sheet, enabling efficiencies of scale and capital deployment,” says Acergy Chairman Sir Peter Mason. “The enhanced operational capability will produce significant benefits for our clients and provide substantial growth opportunities for our people, which is expected in turn to deliver greater value creation for our shareholders.”


06/21/2010

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