Technip announced today an agreement to acquire the entire share capital of Global Industries and reinforce its leadership in the fast-growing subsea segment of oil services.
The two companies have entered into a definitive merger agreement whereby Technip will pay US$8.00 per Global Industries share. The transaction values Global Industries at US$1,073 million (€768 million at current exchange rates), including approximately US$136 million of net debt. The Board of Directors of Global Industries has unanimously approved the transaction.
The transaction price represents a 55% premium to Global Industries’ share closing price on September 9, 2011, the last day prior to announcement of the transaction. The transaction is to be funded using existing cash balances and credit facilities.
Global Industries brings to Technip its complementary subsea know-how, assets and experience, comprising 2,300 employees operating 14 vessels, including notably two newly built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.
Technip’s global presence, world-class technologies, assets and services and strong project management track record will realize the full value and potential of Global Industries’ knowhow, assets and experience, and broaden opportunities for Global Industries’ employees.
The acquisition of Global Industries reinforces Technip’s leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip’s current capabilities and expand its addressable market by around 30% in deep-to-shore subsea infrastructure. Cost synergies are estimated to be at least US$30
million.
Given the anticipated synergies, the transaction is expected to be accretive to Technip’s earnings per share by around 5 to 7% in 2013.
The transaction is expected to close early in 2012. The management teams of Global Industries and Technip will work closely together to define the integration plan.
