Saipem and Subsea 7 Announce $4.63B Merger, Creating Offshore Energy Giant

Italian oil services firm Saipem (BIT:SPMI) and Norwegian competitor Subsea 7 (OL:SUBC) are merging in a $4.63 billion deal to form an offshore energy powerhouse. The announcement sent Subsea 7 shares soaring over 7% and Saipem up around 3% in European trading on Monday.

Under the agreement, Subsea 7 shareholders will receive 6.688 Saipem shares per existing share. Additionally, Subsea 7 will issue a €450 million special dividend before closing. The combined entity, Saipem7, will boast a €43 billion ($45 billion) backlog, annual revenue of €20 billion, and EBITDA exceeding €2 billion.

Ownership will be evenly split, with Saipem and Subsea 7 shareholders each holding 50%. RBC Capital Markets analysts noted the deal places a premium on Subsea 7’s market value, factoring in its pre-merger cash distribution.

This merger has backing from key stakeholders, including Subsea 7’s reference shareholder Siem Industries, along with Eni and Cassa Depositi e Prestiti (CDP), which hold stakes in Saipem. The companies have signed a memorandum of understanding in support of the transaction.

The deal is projected to generate €300 million in annual synergies within three years. Analysts at Jefferies view the merger as a strategic move to strengthen financial capabilities amid growing offshore energy demand, also highlighting past merger discussions in 2019.

With a robust order backlog and combined expertise, Saipem7 aims to enhance its competitive position against U.S. rivals while addressing industry challenges through economies of scale.