Strategic Highlights
- Creates a leader in Subsea, Surface and
Onshore/Offshore, driven by technology and innovation
- Builds a comprehensive and flexible
offering across each market from concept to project delivery and
beyond
- Accelerates growth: broader portfolio
of solutions will increase innovation, improve execution, reduce
costs and enhance customer success
- The combined company will be called
TechnipFMC. It brings together two complementary market leaders and
their talented employees, building on the proven success of their
existing alliance, enabling rapid integration.
Financial Highlights
- Combined 2015 revenue of $20 billion
and EBITDA (11) of $2.4 billion; $20 billion backlog on March 31,
2016
- All-stock transaction: Technip
shareholders to receive 2.0 shares of the combined company for each
share of Technip; FMC Technologies shareholders to receive 1.0
share of the combined company for each share of FMC Technologies;
TechnipFMC to be listed on the New York and Paris stock
exchanges
- Expected to deliver at least $400
million in annual pretax cost synergies in 2019
- Significantly accretive to both
companies’ earnings per share
- One of the strongest balance sheets in
the industry
Technip (Euronext:TEC) and FMC Technologies, Inc. (NYSE:FTI)
today announce that the companies will combine to create a global
leader that will drive change by redefining the production and
transformation of oil and gas. The combined company, which will be
called TechnipFMC, would have an equity value of $13 billion based
on pre-announcement share prices.
The companies have entered into a Memorandum of Understanding
(MOU) and expect to execute a definitive business combination
agreement to combine the companies in an all-stock merger
transaction. Under the terms of the MOU, Technip shareholders will
receive two shares of the new company for each share of Technip,
and FMC Technologies shareholders will receive one share of the new
company for each share of FMC Technologies. Each company’s
shareholders will own close to 50 percent of the combined
company.
The transaction brings together two market leaders and their
talented employees, building on the proven success of their
existing alliance and joint venture, Forsys Subsea, uniting
innovative technologies, common cultures and values, enabling rapid
integration. The combined company will offer a new generation of
comprehensive solutions in Subsea, Surface and Onshore/Offshore to
reduce the cost of producing and transforming hydrocarbons.
TechnipFMC’s flexible commercial model will provide both integrated
and discrete solutions to customers across the value chain. With
more than 49,000 employees operating in over 45 countries,
TechnipFMC generated 2015 combined revenue of approximately $20
billion and combined 2015 EBITDA of approximately $2.4 billion. As
of March 31, 2016, the two companies together had consolidated
backlog of approximately $20 billion.
John Gremp, Chairman and Chief Executive Officer of FMC
Technologies, said, “This is a compelling combination that will
create significant additional value for clients and all
shareholders, by expanding the success that FMC Technologies and
Technip have achieved through our alliance and joint venture, to
capitalize on new opportunities and drive accelerated growth.”
Thierry Pilenko, Technip Chairman and Chief Executive Officer,
who will serve as Executive Chairman of TechnipFMC, stated,
“Technip and FMC Technologies both have long track records of
innovation and commitment to helping their clients meet the
challenges of the oil and gas industry. A year ago, we were at the
forefront of recognizing the importance of a broader view of our
clients’ challenges and seized the opportunity that working
together in our alliance could bring. Today we want to take this
strategy further and across the full footprint of the two
companies. We have complementary skills, technologies and
capabilities which our customers can access on an integrated basis
or separately as they prefer. Together, TechnipFMC can add more
value across Subsea, Surface and Onshore/Offshore, enabling us to
accelerate our growth. I am confident that we can quickly
demonstrate the power of TechnipFMC to our clients, our people and
our shareholders.”
Doug Pferdehirt, President and Chief Operating Officer of FMC
Technologies, who will serve as the CEO of TechnipFMC, added, “Our
alliance has shown that as customers evaluate solutions, they are
involving us in the process earlier and to a greater degree than
ever before. The more they seek our recommendations and new
products, the more we differentiate ourselves from the competition.
This transaction will allow us to deliver even greater benefits to
our customers through a broadened portfolio that provides a unique
set of integrated technologies and competencies that are
underpinned by a history of developing rich partnerships and
creating customer success. We look forward to rapidly bringing
together the outstanding employees and cultures of both companies,
as well as the complementary capabilities of our organizations, to
position the combined company at the forefront of a new generation
of solutions for the oil and gas industry.”
Strategic Benefits of the Combination
- Creates a leader in Subsea, Surface
and Onshore/Offshore, driven by technology and innovation: The
new company will combine Technip’s innovative systems and
solutions, state of the art assets, engineering strengths and
project management capabilities with FMC Technologies’ leading
technology, manufacturing and service capabilities. Together,
TechnipFMC will engage with customers earlier in the development
process to design, deliver and install more comprehensive
solutions, redefining the production and transformation of
hydrocarbons.
- Builds a comprehensive and flexible
offering across each market from concept to project delivery and
beyond: The combined company allows for a simplified,
go-to-market strategy that spans from individual products or
services to fully integrated solutions. With a single interface to
ensure seamless execution, the combined company will significantly
reduce the cost of development for customers for both new and
existing fields.
- Accelerates growth: broader
portfolio of solutions will increase innovation, improve execution,
reduce costs and enhance customer success: The combined company
will leverage both FMC Technologies’ and Technip’s competencies to
accelerate technology innovation, integrate and improve project
execution and reduce costs for customers. It will expand on
competencies in digital life-of-field and data management services
to reduce maintenance and enhance production.
- TechnipFMC brings together two
complementary market leaders and their talented employees, building
on the proven success of their existing alliance, enabling a rapid
integration: The combined company expects its global reach,
flexibility, advanced engineering capabilities, and distinctive
technologies and competencies will position it as a global industry
leader. Bringing together the two companies’ common cultures,
talented employees and customer portfolios is also expected to
drive profitable growth and value creation.
Financial Benefits of the Combination
- All-stock transaction expected to
deliver at least $400 million in annual pretax cost synergies:
The combined company will quickly implement its new organizational
plan following closing. The combined company expects to achieve
pretax cost synergies of approximately $200 million in 2018, and of
at least $400 million in 2019 and thereafter. These cost synergies
are in addition to the cost saving to be delivered through the
plans that the two companies have separately announced previously.
The cost synergies are primarily related to supply chain
efficiencies, real estate, infrastructure optimization and other
corporate and organizational efficiencies. Therefore, this
transaction is expected to be significantly accretive to both
companies’ earnings per share. In addition, revenue synergies
are expected to be achieved from the integrated subsea project
execution model.
- Diversifies revenue mix and drives
cash flow: The combined company had a consolidated backlog of
$20 billion as of March 31, 2016, providing revenue visibility over
the mid-term. This backlog will drive well-diversified cash flow,
providing financial strength and flexibility for continued
investment in strategic initiatives as well as research and
development. All of these elements make both Technip and FMC
Technologies confident in the combined company’s ability to fund
both an annual cash dividend and a share repurchase program.
- One of the strongest balance sheets
in the industry: The all-stock transaction will create a
company with a solid and sustainable capital structure by combining
two of the strongest balance sheets in the industry. Bringing
together two industry leaders will drive profitable growth and
value creation, especially as market conditions improve.
Transaction Terms
Under the terms of the agreement, FMC Technologies and Technip
will be merged into a new entity. At closing, each share of Technip
common stock will be converted into 2.0 ordinary shares of
TechnipFMC and each common share of FMC Technologies will be
exchanged for 1.0 ordinary share of TechnipFMC.
Leadership, Governance, Structure
Technip Chairman and CEO, Thierry Pilenko, will serve as
Executive Chairman of TechnipFMC’s Board of Directors. Doug
Pferdehirt, currently FMC Technologies’ President and COO, will
serve as CEO of TechnipFMC. FMC Technologies announced on May 9,
2016 that Doug Pferdehirt will be appointed as CEO of FMC
Technologies effective September 1, 2016.
The Board of Directors will consist of seven members designated
by FMC Technologies, including Doug Pferdehirt, and seven members
designated by Technip, including Thierry Pilenko. The governance
principles provide for clear and balanced corporate governance and
leadership.
The group will organize its activities into five business units
covering Surface, Subsea Services, Products, Subsea Projects, and
Onshore/Offshore, with the first two headquartered in Houston and
the others in Paris.
The TechnipFMC senior management team will include executives
from both companies. The heads of the above business units have
been identified and will be communicated in due course along with
the other senior functional and operational executives of the
company.
Headquarters
TechnipFMC will have its operational headquarters in Paris,
France, (where the Executive Chairman will have his principal
office), in Houston, Texas, USA (where the CEO will have his
principal office) and in London, United Kingdom (where the Forsys
Subsea JV is headquartered and the new corporation will be
domiciled).
The global Integrated Research and Development center will be
located in France and is expected to grow as it drives innovation
and technology throughout the new company.
Upon closing, TechnipFMC shares will trade on the New York Stock
Exchange and on the Paris Euronext Stock Exchange.
Timing and Approvals
The business combination was unanimously approved by the
eligible directors of the Boards of both companies. The transaction
is expected to close early in 2017, subject to the approval of both
Technip and FMC Technologies shareholders, regulatory approvals and
consents, as well as other customary closing conditions. Bpifrance
Participations and IFPEN, shareholders of Technip, support the
transaction as presented.
Advisors
Goldman Sachs and Rothschild are acting as financial advisors
and Darrois Villey Maillot Brochier and Davis Polk & Wardwell
LLP are serving as legal counsel to Technip. Evercore and
Société Générale are acting as financial advisors and Latham &
Watkins LLP is serving as legal counsel to FMC Technologies.
Memorandum of Understanding
The Memorandum of Understanding documentation will be made
available on the Securities and Exchange Commission (SEC) website
at https://www.sec.gov/edgar.shtml
Practical information
On Thursday, May 19, 2016
Investor Calls at 09:30am CET and again at 02:00pm CET/08:00am EST
Press Conference at 10:45am CET at 89 Avenue de la Grande Armée, 75116
Paris
Investor Calls Details
Investor Call 1, at 09:30am Paris time (London 08:30am, New York
03:30am)
FR: +33 (0) 1 70 77 09 38
UK: +44 (0) 207 107 1613
US (Free): +1 866 907 59 28
Investor Call 2, at 08:00am New York time (Paris 02:00pm, London
01:00pm)
FR: +33 (0) 1 70 77 09 41
UK: +44 (0) 203 367 9456
USA (Free): +1 866 907 59 25
Replays – available for 90 days
All details available on Technip’s and FMC Technologies’
websites
Press Conference Details
10:45-11:45am CET at 89 Avenue de la Grande Armée, 75116
Paris.
Held by Thierry Pilenko, Chairman and CEO of Technip, and Doug
Pferdehirt, President and Chief Operating Officer of FMC
Technologies
About Technip
Technip is a world leader in project management, engineering and
construction for the energy industry. From the deepest Subsea oil
& gas developments to the largest and most complex Offshore and
Onshore infrastructures, our 32,500 people are constantly offering
the best solutions and most innovative technologies to meet the
world’s energy challenges. Present in 45 countries, Technip has
state-of-the-art industrial assets on all continents and operates a
fleet of specialized vessels for pipeline installation and subsea
construction. Technip shares are listed on the Euronext Paris
exchange, and its ADR is traded in the US on the OTCQX marketplace
as an American Depositary Receipt (OTCQX:TKPPY). Visit us at
www.technip.com
About FMC Technologies
FMC Technologies, Inc. (NYSE: FTI) is the global market leader
in subsea systems and a leading provider of technologies and
services to the oil and gas industry. We help our customers
overcome their most difficult challenges, such as improving shale
and subsea infrastructures and operations to reduce cost, maintain
uptime, and maximize oil and gas recovery. The company has
approximately 16,500 employees and operates 29 major production
facilities and services bases in 18 countries. Visit
www.fmctechnologies.com or follow us on Twitter @FMC_Tech for more
information.
Forward-Looking Statements
This communication contains “forward-looking statements”. All
statements other than statements of historical fact contained in
this report are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). Forward-looking
statements usually relate to future events and anticipated
revenues, earnings, cash flows or other aspects of our operations
or operating results. Forward-looking statements are often
identified by the words “believe,” “expect,” “anticipate,” “plan,”
“intend,” “foresee,” “should,” “would,” “could,” “may,” “estimate,”
“outlook” and similar expressions, including the negative thereof.
The absence of these words, however, does not mean that the
statements are not forward-looking. These forward-looking
statements are based on our current expectations, beliefs and
assumptions concerning future developments and business conditions
and their potential effect on us. While management believes that
these forward-looking statements are reasonable as and when made,
there can be no assurance that future developments affecting us
will be those that we anticipate.
Factors that could cause actual results to differ materially
from those in the forward-looking statements include failure to
obtain applicable regulatory or stockholder approvals in a timely
manner or otherwise; failure to satisfy other closing conditions to
the proposed transactions; failure to obtain favorable opinions
from counsel for each company to the effect of how TechnipFMC PLC
(“TechnipFMC”) should be treated for U.S. tax purposes as a result
of the proposed transaction; risks associated with tax liabilities,
or changes in U.S. federal or international tax laws or
interpretations to which they are subject, including the risk that
the Internal Revenue Service disagrees that TechnipFMC is a foreign
corporation for U.S. federal tax purposes; risks that the new
businesses will not be integrated successfully or that the combined
companies will not realize estimated cost savings, value of certain
tax assets, synergies and growth or that such benefits may take
longer to realize than expected; failure to realize anticipated
benefits of the combined operations; risks relating to
unanticipated costs of integration; reductions in client spending
or a slowdown in client payments; unanticipated changes relating to
competitive factors in the companies’ industries; ability to hire
and retain key personnel; ability to successfully integrate the
companies’ businesses; the potential impact of announcement or
consummation of the proposed transaction on relationships with
third parties, including clients, employees and competitors;
ability to attract new clients and retain existing clients in the
manner anticipated; reliance on and integration of information
technology systems; changes in legislation or governmental
regulations affecting the companies; international, national or
local economic, social or political conditions that could adversely
affect the companies or their clients; conditions in the credit
markets; risks associated with assumptions the parties make in
connection with the parties’ critical accounting estimates and
legal proceedings; and the parties’ international operations, which
are subject to the risks of currency fluctuations and foreign
exchange controls.
All of our forward-looking statements involve risks and
uncertainties (some of which are significant or beyond our control)
and assumptions that could cause actual results to differ
materially from our historical experience and our present
expectations or projections. You should carefully consider the
foregoing factors and the other risks and uncertainties that affect
the parties’ businesses, including those described in FMC
Technologies’ (“FMC Technologies”) Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other documents filed from time to time by FMC Technologies and
TechnipFMC with the United States Securities and Exchange
Commission (the “SEC”) and those described in Technip’s (“Technip”)
annual reports, registration documents and other documents filed
from time to time with the French financial markets regulator
(Autorité des Marchés Financiers or the “AMF”). We wish to caution
you not to place undue reliance on any forward-looking statements,
which speak only as of the date hereof. We undertake no obligation
to publicly update or revise any of our forward-looking statements
after the date they are made, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
Additional Information
Important Additional Information Will be
Filed with the SEC
TechnipFMC will file with the SEC a registration statement on
Form S-4, which will include the proxy statement of FMC
Technologies that also constitutes a prospectus of TechnipFMC (the
“proxy statement/prospectus”). INVESTORS AND STOCKHOLDERS ARE URGED
TO CAREFULLY READ THE PROXY STATEMENT/PROSPECTUS, AND OTHER
RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT FMC TECHNOLOGIES, TECHNIP, TECHNIPFMC, THE
PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors and
stockholders will be able to obtain free copies of the proxy
statement/prospectus and other documents filed with the SEC by the
parties through the website maintained by the SEC at www.sec.gov.
In addition, investors and stockholders will be able to obtain free
copies of the proxy statement/prospectus and other documents filed
with the SEC on FMC Technologies’ website at
www.fmctechnologies.com (for documents files with the SEC by FMC
Technologies) or on Technip’s website at www.technip.com (for
documents files with the SEC with Technip).
Additional Information Will be Made
Available in an Information Document
Technip will prepare an information document to be made
available in connection with the Technip meeting of stockholders
called to approve the proposed transaction (the “Report”).
INVESTORS AND STOCKHOLDERS ARE URGED TO CAREFULLY READ THE
INFORMATION DOCUMENT, AND OTHER RELEVANT DOCUMENTS TO BE PUBLISHED
ON THE TECHNIP WEBSITE, IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT FMC
TECHNOLOGIES, TECHNIP, TECHNIPFMC, THE PROPOSED TRANSACTIONS AND
RELATED MATTERS. Investors and stockholders will be able to obtain
free copies of the information document from Technip on its website
at www.technip.com or by contacting Technip’s Investor
Relations.
Important Additional Information Will be
Made Available in an Prospectus Prepared in accordance with the EU
Prospectus Directive
TechnipFMC will make publicly available a prospectus, prepared
in accordance with the EU Prospectus Directive 2003/71/EC, with
respect to the issuance of new shares as a result of the proposed
transaction and their admission to trading on the regulated market
of Euronext Paris (including any supplement thereto, the “Admission
Prospectus”). INVESTORS AND STOCKHOLDERS ARE URGED TO CAREFULLY
READ THE ADMISSION PROSPECTUS, AND OTHER RELEVANT DOCUMENTS, IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT FMC TECHNOLOGIES, TECHNIP, TECHNIPFMC,
THE PROPOSED TRANSACTIONS AND RELATED MATTERS. Investors and
stockholders will be able to obtain free copies of the Admission
Prospectus from TechnipFMC when available.
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote in any jurisdiction pursuant to the
proposed transactions or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall be
made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act and applicable European
regulations. Subject to certain exceptions to be approved by the
relevant regulators or certain facts to be ascertained, the public
offer will not be made directly or indirectly, in or into any
jurisdiction where to do so would constitute a violation of the
laws of such jurisdiction, or by use of the mails or by any means
or instrumentality (including without limitation, facsimile
transmission, telephone and the internet) of interstate or foreign
commerce, or any facility of a national securities exchange, of any
such jurisdiction.
Participants in Solicitation
FMC Technologies, Technip, TechnipFMC and their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the stockholders of FMC
Technologies and Technip, respectively, in respect of the proposed
transactions contemplated by the proxy statement/prospectus and the
Report. Information regarding the persons who are, under the rules
of the SEC, participants in the solicitation of the stockholders of
FMC Technologies and Technip, respectively, in connection with the
proposed transactions, including a description of their direct or
indirect interests, by security holdings or otherwise, will be set
forth in the proxy statement/prospectus when it is filed with the
SEC. Information regarding FMC Technologies’ directors and
executive officers is contained in FMC Technologies’ Annual Report
on Form 10-K for the year ended December 31, 2015 and its Proxy
Statement on Schedule 14A, dated March 25, 2016, which are filed
with the SEC and can be obtained free of charge from the sources
indicated above. Information regarding Technip’s directors and
executive officers is contained in Technip’s annual report for the
year ended December 31, 2015 files with the AMF and can be obtained
free of charge from the sources indicated above.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160518006672/en/
For
Technip:InvestorsAurélia Baudey-Vignaud, +33 (0)
1 85 67 43 81abaudeyvignaud@technip.comorElodie
Robbe-Mouillot, +33 (0) 1 85 67 43
86erobbemouillot@technip.comorMediaChristophe
Bélorgeot, +33 (0) 1 47 78 39 92cbelorgeot@technip.comorLaure
Montcel, +33 (0) 1 49 01 87 81lmontcel@technip.comorCharles
Fleming, +33 (6) 14 45 05
22charles.fleming@havasww.comorFor FMC
Technologies:InvestorsMatt Seinsheimer,
281-260-3665investorrelations@fmcti.comorMediaLisa Albiston,
281-610-9076media.request@fmcti.comorLisa Adams,
281-405-4659media.request@fmcti.com
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