Technip and FMC Technologies, Inc. executed a Business Combination Agreement (BCA) on June 14, 2016 regarding their proposed merger announced on May 19, 2016. The execution of the BCA follows conclusion of the required work council consultation process in Europe.
“With the signing of the BCA, we have reached an important milestone paving the way to building a unique offering, driving change by redefining the production and transformation in the oil and gas industry,” said Thierry Pilenko, Technip Chairman and Chief Executive Officer, who will serve as Executive Chairman of the combined company, TechnipFMC.
Doug Pferdehirt, President and Chief Operating Officer of FMC Technologies, who will serve as the CEO of TechnipFMC, added, “The combination of FMC Technologies and Technip is an exciting opportunity for both companies to shape the future of the oil and gas industry by accelerating technology innovation, integrating and improving project execution and reducing costs for customers. Having concluded the consultation process so quickly is a testament to the logic and strategic rationale of this merger.”
The BCA is available on the U.S. Securities and Exchange Commission (SEC) website as an EDGAR filing and on the websites of Technip and FMC Technologies.
The transaction is expected to close in early 2017, subject to the approvals of Technip and FMC Technologies shareholders, regulatory approvals and consents, as well as other customary closing conditions.
The companies will combine in an all-stock merger transaction to create a global leader that will drive change by redefining the production and transformation of oil and gas. Each company’s shareholders will own close to 50 percent of the combined company.
In addition, Bpifrance supports the transaction and has confirmed to Technip and FMC Technologies that all its governing bodies have approved the terms of the support agreement, in particular the commitment to vote in favor of the resolutions regarding the transaction which will be submitted to Technip’s shareholders’ meeting, subject notably to Technip Board of Directors’ favorable recommendation. Given that it had previously been agreed that Bpifrance will have a seat on the board of directors of TechnipFMC, Bpifrance will retain its Technip shares until the completion of the transaction, with the ability to increase its shareholding up to a maximum 6% of the share capital of TechnipFMC, on a fully-diluted basis, for a two-year period starting at completion of the transaction.
Transaction Highlights
Strategic Highlights
- Creates a leader in Subsea, Surface and Onshore/Offshore, driven by technology and innovation
- Builds a comprehensive and flexible offering across each market from concept to project delivery and beyond
- Accelerates growth: broader portfolio of solutions will increase innovation, improve execution, reduce costs and enhance customer success
- The combined company will be called TechnipFMC. It brings together two complementary market leaders and their talented employees, building on the proven success of their existing alliance, enabling rapid integration.
Financial Highlights
- Combined 2015 revenue of $20 billion and EBITDA(1) of $2.4 billion; $20 billion backlog on March 31, 2016
- All-stock transaction: Technip shareholders to receive 2.0 shares of the combined company for each share of Technip; FMC Technologies shareholders to receive 1.0 share of the combined company for each share of FMC Technologies; TechnipFMC to be listed on the New York and Paris stock exchanges
- Expected to deliver at least $400 million in annual pretax cost synergies in 2019
- Significantly accretive to both companies’ earnings per share
- One of the strongest balance sheets in the industry