Italian oilfield services company Saipem will merge with Norwegian peer Subsea7 to create a global market leader in the subsea engineering and construction offshore sector. This monumental move was announced in a late Sunday release. The signed memorandum of understanding for the principal terms of the proposed merger entails an exchange of 6.688 Saipem shares for each Subsea7 share held.
Furthermore, reports have pegged the value of this planned transaction at approximately $4.63 billion. The memorandum also outlines the distribution of an extraordinary dividend payment of 450 million euros to Subsea7 shareholders prior to the completion of the European Union cross-border statutory merger, which will see Subsea7 incorporated into Saipem.
Shareholders of both entities will enjoy equal ownership of 50% in the newly formed company, which will operate under the name Saipem7 and be listed on both the Milan and Oslo stock exchanges. The merger comes at a time when the scale of projects sought by clients is surging. The new Milan-based entity aims to offer a diversified fleet of over 60 construction vessels along with a broad spectrum of offshore and onshore services including drilling, engineering, construction, and life-of-field services as well as decommissioning.
Saipem7’s revenue and backlog are anticipated to reach 20 billion euros and 43 billion euros, respectively. Thanks to optimized fleet management, procurement, enhanced sales and marketing strategies, and improved process efficiencies, the companies foresee annual synergies of 300 million euros by the third year post-merger, which is expected to close in the latter half of 2026.
Notably, the one-off costs to achieve these synergies are estimated to be around 270 million euros. Moreover, Saipem's primary shareholders, Eni and the Italian sovereign wealth fund, Cassa Depositi e Prestiti Equity, have also entered into a memorandum of understanding with Subsea7’s largest shareholder, Siem Industries, signaling their support for this ambitious deal.
Together, these three companies will appoint the majority of the board of the combined entity and retain a significant 29% stake. "Saipem and Subsea7 exhibit strong geographical and customer-base complementarity," stated Eni, the Italian integrated energy company. "Their combination will not only enhance the product and service offerings but will also optimize fleet utilization.
Consequently, the merged company stands to gain a strategic advantage in capitalizing on forthcoming commercial opportunities driven by the evolving oil and gas market and the transformative changes associated with the energy transition.".