Milan, Luxembourg, February 23, 2025 – Saipem and Subsea7 have signed a Memorandum of Understanding (MoU) outlining the key terms of a potential merger (the “Proposed Combination“). The merger would establish a global leader in the energy services sector.
Key Highlights of the Merger
- The newly formed entity, “Saipem7,” will have an aggregated order backlog of €43 billion, annual revenues of approximately €20 billion, and an EBITDA exceeding €2 billion.
- A global workforce of over 45,000 professionals, including 9,000+ engineers and project managers.
- Strong geographic complementarity, combined expertise, advanced technologies, and a robust fleet to serve a global client base.
- Equal ownership structure: Shareholders of Saipem and Subsea7 will each hold 50% of Saipem7.
- Subsea7 shareholders will receive 6.688 Saipem shares for each Subsea7 share they own.
- Subsea7 will distribute a special dividend of €450 million before the transaction closes.
- The merger is expected to generate significant value, with annual synergies of approximately €300 million by the third year post-merger, with one-off costs estimated at €270 million.
- Saipem7 will be publicly listed on both the Milan and Oslo stock exchanges.
- Major shareholders, including Siem Industries (Subsea7), CDP Equity, and Eni (Saipem), have pledged strong support and committed to voting in favor of the deal.
- The transaction is expected to be completed in the second half of 2026.
Strategic Rationale Behind the Merger
Saipem and Subsea7’s management teams believe the creation of a global energy services leader is well justified, given the increasing scale and complexity of client projects. The companies’ market offerings and geographic footprints are highly complementary, ensuring enhanced value for shareholders in both the current and future market environments.
Key Benefits for Clients:
- Comprehensive Offshore & Onshore Solutions: Expanded service portfolio, including drilling, engineering, construction, maintenance, and decommissioning services across oil, gas, carbon capture, and renewable energy sectors.
- Industry-Leading Expertise: A specialized global workforce of 45,000+ professionals across 60+ countries, delivering high-value solutions to clients.
- Enhanced Fleet & Global Presence: A diversified fleet of over 60 construction vessels, capable of executing a broad range of projects, from shallow-water operations to deep-sea developments, including heavy-lift, rigid and flexible pipeline installation, and offshore wind turbine foundation deployment.
- Cutting-Edge Technology & Innovation: A combined pool of expertise that will accelerate offshore technology advancements and improve execution capabilities for complex projects.
Shareholder Value Creation:
- Operational Synergies: Estimated €300 million in annual cost synergies starting from the third year post-merger, driven by fleet optimization, procurement efficiencies, and streamlined commercial processes.
- Optimized Capital Investment: More efficient capital allocation across a larger, more diverse fleet.
- Attractive Shareholder Returns: Post-merger, Saipem7 is expected to distribute at least 40% of Free Cash Flow (after lease liabilities) as dividends.
- Stronger Financial Position: A robust balance sheet that could achieve investment-grade credit ratings.
- Expanded Access to Capital Markets: Broader investor base and diversified financing sources.
Transaction Structure & Shareholding
- Saipem7 will be formed through a cross-border merger of Subsea7 into Saipem under EU regulations.
- The company will be legally headquartered in Milan, with shares listed on the Milan and Oslo stock exchanges.
- Siem Industries will hold approximately 11.9% of Saipem7, while Eni and CDP Equity will own 10.6% and 6.4%, respectively.
Terms of the Deal
- Subsea7 shareholders will receive 6.688 newly issued Saipem7 shares for each Subsea7 share they hold.
- Assuming full participation by Subsea7 shareholders, the combined entity’s shareholding structure will remain evenly split (50-50) between current Saipem and Subsea7 investors.
- Subsea7 will issue a €450 million special dividend before the deal closes.
Organizational Structure of Saipem7
Saipem7 will operate four business divisions:
- Offshore Engineering & Construction – To be housed within a semi-autonomous subsidiary operating under the “Subsea7 – a Saipem7 Company” brand, headquartered in London. This unit will include all existing Subsea7 activities and Saipem’s Asset-Based Services segment, contributing approximately 83% of group EBITDA.
- Onshore Engineering & Construction – Focused on risk reduction and profitability maximization.
- Sustainable Infrastructures – Targeting expansion in the Italian market with potential international growth.
- Offshore Drilling – Continuing its strategy to maximize EBITDA and cash flow.
Shareholder Compensation & Dividends
- Both Saipem and Subsea7 may distribute up to $350 million each in dividends in 2025.
- If the merger is not completed by the time 2025 financial results are approved, each company may distribute at least $300 million in dividends for 2026.
- Following the merger, Saipem7 intends to allocate at least 40% of Free Cash Flow (after lease liability repayments) to shareholder dividends.
Governance & Lock-Up Agreements
Siem Industries, CDP Equity, and Eni have signed a separate MoU supporting the merger. They have also agreed on a Shareholder Agreement that will take effect upon completion of the transaction, including:
- A three-year lock-up commitment.
- Standstill provisions.
- A joint nomination list for the majority of the Board of Directors.
- Saipem7’s Chairman will be nominated by Siem Industries, while the CEO will be appointed by CDP Equity and Eni.
- Alessandro Puliti is expected to become CEO of Saipem7, while John Evans is anticipated to lead the Offshore Engineering & Construction division.
- The company’s bylaws will include a dual voting rights mechanism (two votes per share).
Timeline & Regulatory Approvals
- The final merger agreement is contingent upon successful due diligence and Board approvals from Saipem and Subsea7.
- Labor union consultations will be conducted in compliance with local regulations.
- The transaction is subject to standard conditions, including shareholder approvals and regulatory clearances from the Italian government and other relevant authorities.
- Saipem and Subsea7 have committed to exclusivity in their merger negotiations.
- Final approval is expected in mid-2025, with transaction completion anticipated in the second half of 2026.
Conference Call Details
Saipem and Subsea7 executives will host a conference call on Monday, February 24, 2025, at 10:00 AM CET to discuss the transaction. Join the call at: https://edge.media-server.com/mmc/p/az2o9ou7/
Presentation materials will be available on www.saipem.com and www.subsea7.com, with a recording available post-call.
Advisors
Saipem’s advisors: Goldman Sachs International (lead financial), Deutsche Bank AG Milan (financial), Clifford Chance LLP (legal for Italian, English, U.S., and Luxembourg law), Advokatfirmaet Thommessen AS (Norwegian legal counsel).
Subsea7’s advisors: Kirk Lovegrove & Company (lead financial), Deloitte LLP (financial), Freshfields LLP (legal for Italian, English, and U.S. law), Elvinger Hoss Prussen SA (Luxembourg legal), Advokatfirmaet Wiersholm AS (Norwegian legal).