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execution of a memorandum of understanding (the âMoUâ). The Proposed Combination
is expected to create a global leader in energy services.
Highlights
- The combination of Saipem and Subsea7 (the âCombined Companyâ) will be
renamed Saipem7, and will have a combined backlog of EUR43 billion(2), Revenue
of approx. EUR20 billion(3) and EBITDA in excess of EUR2 billion(4)
- A global organisation of over 45,000 people, including more than 9,000
engineers and project managers
- Highly complementary geographical footprints, competencies and capabilities,
vessel fleets and technologies that will benefit the Combined Companyâs
global client base
- Saipem and Subsea7 shareholders will own 50% each of the share capital of
the Combined Company
- Subsea7 shareholders will receive 6.688 Saipem shares for each Subsea7 share
held. Subsea7 will distribute an extraordinary dividend for an amount equal
to EUR450 million immediately prior to completion
- Transaction expected to deliver material value creation for the shareholders
of both Saipem and Subsea7. Annual synergies of approximately EUR300 million
are expected to be achieved in the third year after completion, with one-off
costs to achieve such synergies of approximately EUR270 million
- The Combined Company will be listed on both the Milan and Oslo stock
exchange
- Siem Industries, reference shareholder of Subsea7, as well as Eni and CDP
Equity, reference shareholders of Saipem, have expressed their strong
support and intend to vote in favour of the transaction
- Completion anticipated to occur in the second half of 2026
The management of both Saipem and Subsea7 share the conviction that there is
compelling logic in creating a global leader in energy services, particularly
considering the growing size of clientsâ projects. Saipem and Subsea7 are highly
complementary in terms of market offerings and geographies. The combination
would enhance value for shareholders, and all stakeholders, both in the current
market and in the long term.
CDP Equity, Eni and Siem Industries have entered into a separate Memorandum of
Understanding, undertaking to support the Proposed Combination and agreeing on
the terms of a Shareholders Agreement, to be effective from completion of the
Proposed Combination. As part of this, it is intended that the Combined
Companyâs Chairman will be designated by Siem Industries and that the Combined
Companyâs CEO will be designated by CDP Equity and Eni. In addition, it is
currently envisaged that Mr Alessandro Puliti will be appointed as CEO of the
Combined Company(5) while it is currently envisaged that Mr John Evans will be
the CEO of the entity that will manage the Offshore business of the Combined
Company. Such Offshore business will comprise all of Subsea7 and Saipemâs
Offshore Engineering & Construction activities.
The by-laws of the Combined Company are expected to provide for loyalty shares
(double votes).
Strategic Rationale of the Proposed Combination
The Proposed Combination would be beneficial to the clients of both Saipem and
Subsea7, bringing together the respective strengths of both companies:
- Comprehensive Solutions for Clients: a full spectrum of offshore and onshore
services, from drilling, engineering and construction to life-of-field
services and decommissioning, with an increased ability to optimise project
schedules for clients in oil, gas, carbon capture and renewable energy
- World-class Expertise and Experience: a talented, global workforce of over
45,000 people, including more than 9,000 engineers and project managers, in
more than 60 countries, contributing to deliver solutions unlocking value
for clients
- Global Reach and Diversified Fleet: an expanded and diversified fleet of
more than 60 construction vessels enhancing the Combined Companyâs ability
to undertake a wide range of projects, from shallow water to ultra-deepwater
operations, utilising a full portfolio of heavy lift, high-end J-lay, S-lay
and reel-lay rigid pipeline solutions, flexible pipe and umbilical lay
services and market-leading wind turbine, foundation and cable lay
installation capabilities
- Innovation and Technology: combined expertise to foster innovation in
offshore technologies, ensuring cutting-edge solutions for complex projects
The transaction would create significant shareholder value through:
- Synergies: expected annual synergies of approximately EUR300 million in the
third year after completion, driven by fleet optimisation, procurement,
sales and marketing, and process efficiencies
- A More Efficient Capital Investment Programme: optimised allocation of
capital across a broader, complementary vessel fleet
- An Attractive Shareholder Remuneration Policy: post-completion, Saipem7 is
expected to pay a dividend of at least 40% of Free Cash Flow(6) after
repayment of lease liabilities
- Enhanced Capital Structure: a solid balance sheet that is expected to
support an investment grade credit rating
- Greater Scale in Both Equity and Debt Capital Markets: access to a wider
investor base and to more diversified sources of capital
Transaction Structure and Ownership
- The Combined Company would be created by way of an EU cross-border statutory
merger carried out by way of incorporation of Subsea 7 into Saipem, with the
latter to be renamed âSaipem7â. The Combined Company would be headquartered
in Milan and have its shares listed on both the Milan and the Oslo stock
exchanges
- Siem Industries (being the largest shareholder of Subsea7) would then own
approximately 11.9% of the Combined Companyâs capital, while Eni and CDP
Equity (being the largest shareholders of Saipem) would own approximately
10.6% and approximately 6.4%, respectively
Transaction Terms
- Subsea7 shareholders would receive 6.688 new Saipem7 shares for each Subsea7
share held
- Assuming all Subsea7 shareholders participate in the merger, the share
capital of the Combined Company will be held 50-50% by the current
shareholders of Saipem and Subsea7
- Immediately prior to completion of the Proposed Combination, Subsea7
shareholders would receive an extraordinary cash dividend of EUR450 million(7)
Organisational Structure of the Combined Company
- The Combined Company will be structured in four businesses: Offshore
Engineering & Construction, Onshore Engineering & Construction, Sustainable
Infrastructures and Offshore Drilling
- The Offshore Engineering & Construction business will be incorporated in an
operationally autonomous company, named Subsea7 and branded as âSubsea7 - a
Saipem7 Companyâ, and it is currently envisaged that it will be led by Mr
John Evans. It will comprise all of Subsea7âs business and the Asset Based
Services business of Saipem, representing approximately 83% of the combined
groupâs EBITDA of the last 12 months as of 30 September 2024. The company
will be headquartered in London
- In line with Saipemâs previous strategy, the Onshore Engineering &
Construction will be run with a focus on reducing overall risk and
maximising profitability. The Sustainable Infrastructures business will aim
to consolidate its presence in the Italian market with potential expansion
overseas. The Offshore Drilling division will seek to continue to maximise
its EBITDA and cash flow
Shareholder Remuneration
- The MoU allows Saipem and Subsea7 to make shareholder distributions of up to
$350 million each in 2025, in the form of dividends(8)(,)(9)
- In 2026, if the Proposed Combination is not completed before the approval of
the full year 2025 results of Saipem and Subsea7, the two companies could
each distribute by way of dividends(10)(,)(11) at least $300 million
- Following completion of the Proposed Combination, the Combined Company is
expected to distribute to shareholders at least 40% of Free Cash Flow(12)
after repayment of lease liabilities
Shareholders Agreement
The Memorandum of Understanding amongst Siem Industries, CDP Equity and Eni
provides for, inter alia, a three-year shareholder lock-up and standstill
obligation and the submission of a common slate for the appointment of the
majority of the members of the board of directors of the Combined Company.
Timing, Conditions Precedent and Approvals
The entering into and signing of binding definitive documents in respect of the
Proposed Combination is conditional, inter alia, on the successful completion of
confirmatory due diligence by the parties, the execution of a mutually
satisfactory merger agreement (the âMerger Agreementâ) and the approval of the
final terms of the Proposed Combination by the Board of Directors of Saipem and
Subsea7. The parties will also engage with the relevant works council
consultations required by the applicable laws.
Saipem and Subsea7 have undertaken mutual exclusivity obligations in connection
with the negotiations of the Proposed Combination.
Moreover, completion of the Proposed Combination will be subject to customary
conditions precedent for a transaction of this nature, including, inter alia,
approval by the shareholdersâ meetings of both Saipem and Subsea7, the former to
be also passed with the so-called whitewash majorities for the purposes of the
mandatory takeover bid exemption(13), and obtaining the required Italian
government approval and customary regulatory clearances.
Until such conditions precedent are satisfied, there can be no certainty that
the Proposed Combination will occur.
The MoU also provides for termination rights for each of Saipem and Subsea7 in
connection with material findings in the context of the confirmatory due
diligence, or upon payment of a break-up fee, should any of the companies wish
to terminate the negotiations at its discretion before entering into the Merger
Agreement.
The parties currently envisage to submit the final terms of the Proposed
Combination to their respective Board of Directors for approval and to enter
into the Merger Agreement around mid-2025. Completion is currently anticipated
to occur in the second half of 2026.
Conference Call
On Monday 24 February 2025, at 10:00 CET, the top management of Saipem and
Subsea7 will present the transaction in a dedicated conference call, which can
be followed by connecting to the below URL:
https://edge.media-server.com/mmc/p/az2o9ou7/
The document that will be presented by Saipem and Subsea7 top management will be
available on the two respective websites (www.saipem.com (http://www.saipem.com)
and www.Subsea7.com (http://www.Subsea7.com)). A replay of the call will be
available on the two companiesâ websites.
Advisers
Goldman Sachs International is acting as lead financial advisor to Saipem, and
Deutsche Bank AG, Milan Branch as financial advisor to Saipem. Clifford Chance
LLP is serving as global legal counsel to Saipem in particular as to matters of
Italian, English, US and Luxembourg law, while Advokatfirmaet Thommessen AS is
serving as legal counsel to Saipem as to matters of Norwegian law.
Kirk Lovegrove & Company Limited is acting as lead financial advisor and
Deloitte LLP is acting as financial advisor to Subsea7. Freshfields LLP is
serving as global legal counsel to Subsea7 (including as to matters of Italian,
US and English Law), while Elvinger Hoss Prussen S.A. and Advokatfirmaet
Wiersholm AS are serving as legal counsels as to matters of Luxembourg and
Norwegian law, respectively.
Enquiries
Contact for investment community enquiries:
Saipem Subsea7
Alberto Goretti Katherine Tonks
Head of Investor Relations and Rating
Management Head of Investor Relations
investor.relations@saipem.com
(mailto:investor.relations@saipem.com) ir@subsea7.com (mailto:ir@subsea7.com)
Contact for media enquiries:
Saipem Subsea7
Rossella Carrara Julie Taylor
Director External Communication and
Public Affairs Head of Group Communications
media.relations@saipem.com communications@subsea7.com
(mailto:media.relations@saipem.com) (mailto:communications@subsea7.com)
Saipem is a global leader in the engineering and construction of major projects
for the energy and infrastructure sectors, both offshore and onshore. Saipem is
âOne Companyâ organized into business lines: Asset Based Services, Drilling,
Energy Carriers, Offshore Wind, Sustainable Infrastructures, Robotics &
Industrialised Solutions. The company has 6 fabrication yards and an offshore
fleet of 21 construction vessels (of which 17 owned and 4 owned by third parties
and managed by Saipem) and 15 drilling rigs, of which 9 owned. Always oriented
towards technological innovation, the companyâs purpose is âEngineering for a
sustainable futureâ. As such Saipem is committed to supporting its clients on
the energy transition pathway towards Net Zero, with increasingly digital means,
technologies and processes geared for environmental sustainability. Listed on
the Milan Stock Exchange, it is present in more than 50 countries around the
world and employs about 30,000 people of over 120 nationalities.
Subsea7 is a global leader in the delivery of offshore projects and services for
the energy industry. Subsea7 makes offshore energy transition possible through
the continuous evolution of lower-carbon oil and gas and by enabling the growth
of renewables and emerging energies.
+++
No Offer or Solicitation
This communication and the information contained in it are provided for
information purposes only and are not intended to be and shall not constitute a
solicitation of any vote or approval, or an offer to sell or solicitation of an
offer to buy, or an invitation or recommendation to subscribe for, acquire or
buy securities of Saipem, Subsea 7 or the combined company following the
proposed merger of Saipem and Subsea 7 (the âProposed Business Combination
Transactionâ) or any other financial products or securities, in any place or
jurisdiction, nor shall there be any offer, solicitation or sale of securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made in the United States absent
registration under the U.S. Securities Act of 1933 (the âU.S. Securities Actâ)
or pursuant to an exemption from, or in a transaction not subject to, such
registration requirements.
Forward-looking Statements
This communication contains forward-looking information and statements about
Saipem and Subsea7 and their combined business after completion of the Proposed
Business Combination Transaction. Forward-looking statements are statements that
are not historical facts. These statements include financial projections and
estimates and their underlying assumptions, statements regarding plans,
objectives and expectations with respect to future operations, products and
services, and statements regarding future performance. Forward-looking
statements are generally identified by the words âexpects,â âanticipates,â
âbelieves,â âintends,â âestimatesâ and similar expressions. Although the
managements of Saipem and Subsea7 believe that the respective expectations
reflected in such forward-looking statements are reasonable, investors and
holders of Saipem and Subsea7 shares are cautioned that forward-looking
information and statements are subject to various risks and uncertainties, many
of which are difficult to predict and generally beyond the control of Saipem and
Subsea7, respectively, that could cause actual results and developments to
differ materially from those expressed in, or implied or projected by, the
forward-looking information and statements. Except as required by applicable
law, neither Saipem nor Subsea7 undertake any obligation to update any forward-
looking information or statements.
Important Additional Information about the Proposed Business Combination
Transaction
This communication is not a substitute for a registration statement or for any
other document that Saipem or Subsea7 may file with the U.S. Securities and
Exchange Commission (âSECâ) in connection with the Proposed Business Combination
Transaction. In connection with the Proposed Business Combination Transaction,
Saipem and Subsea7 are filing relevant materials with the SEC, which, to the
extent Saipemâs shares will be required to be registered under the U.S.
Securities Act, may include a registration statement on Form F-4 that contains a
prospectus. If an exemption from the registration requirements of the U.S.
Securities Act is available, the shares issued in connection with the Proposed
Business Combination Transaction will be made available within the United States
pursuant to such exemption and not pursuant to an effective registration
statement on Form F-4.
SAIPEM AND SUBSEA7 URGE INVESTORS AND SHAREHOLDERS TO READ ANY SUCH REGISTRATION
STATEMENT, PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH
THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY
AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT SAIPEM AND SUBSEA7, THE PROPOSED BUSINESS
COMBINATION TRANSACTION AND RELATED MATTERS.
Investors and shareholders can obtain free copies of the prospectus and other
documents filed by Saipem and Subsea7 with the SEC (when they become available)
through the website maintained by the SEC at www.sec.gov. Shareholders of
Subsea7 are urged to read the prospectus, if and when available, and the other
relevant materials when they become available, as well as any supplements and
amendments thereto, before making any voting or investment decision with respect
to the Proposed Business Combination Transaction and will receive information at
an appropriate time on how to obtain these transaction-related documents for
free from the parties involved or a duly appointed agent.
Use of Non-IFRS Financial Measures
This announcement includes certain non-IFRS financial measures with respect to
Saipem and Subsea7, including EBITDA and Net debt. These unaudited non-IFRS
financial measures should be considered in addition to, and not as a substitute
for, measures of Saipemâs and Subsea7âs financial performance prepared in
accordance with IFRS. In addition, these measures may be defined differently
than similar terms used by other companies.
Presentation of Financial Information
This communication includes financial data regarding Saipem and Subsea7 and the
combination of Saipem and Subsea7. The presentation of information in any
registration statement that Saipem may file with the SEC may be different than
the financial data included herein as the financial data included in any
registration statement will be required to comply with the rules and regulations
of the SEC. Further, any financial data contained herein representing the
combination of Saipem and Subsea7 has not been prepared in accordance with the
rules and regulations of the SEC, including the pro forma requirements of
Regulation S-X. Accordingly, pro forma financial data contained in any
registration statement filed with respect to the Proposed Business Combination
Transaction may differ from the pro forma financial data contained herein, and
such differences may be material. Any combined company financial data presented
herein is presented for informational purposes only and is not intended to
represent or be indicative of the actual consolidated results of operations or
financial position that would have been reported had the Proposed Business
Combination Transaction been completed as of October 1(st), 2024, and should not
be taken as representative of the companiesâ future consolidated results of
operations or financial position had the Proposed Business Combination
Transaction occurred as of such date. These estimates are based on financial
information available at the time of the preparation of this communication.
(1) Merger by way of incorporation of Subsea7 into Saipem
(2) Combined backlog for Saipem and Subsea7 as of 30 September 2024
(3) Combined Revenue for Saipem and Subsea7 as per last 12 months as of 30
September 2024
(4) Combined EBITDA for Saipem and Subsea7 as per last 12 months as of 30
September 2024
(5) Subject to approval by the Shareholdersâ Meeting and the Board of Directors
of the Combined Company
(6) Free Cash Flow is defined as Cash Flow from Operations less Capital
Expenditure plus Divestments
(7) Subject to approval by the Shareholdersâ Meeting
(8) Subject to approval by the Shareholdersâ Meeting and the Board of Directors
(9) The dividend paid by Saipem will be qualified as ordinary in nature
(10) Subject to approval by the Shareholdersâ Meeting and the Board of Directors
(11) The dividend paid by Saipem will be qualified as ordinary in nature
(12) Free Cash Flow is defined as Cash Flow from Operations less Capital
Expenditure plus Divestments
(13) Pursuant to Art. 49, paragraph 1, letter g) of Consob Regulation 11971/99
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