By Inti Landauro and Selina Williams
PARIS--France's Technip SA has made a preliminary takeover offer
of EUR1.46 billion ($1.83 billion) in cash for smaller French
oil-services company CGG, a sign of accelerating consolidation in
the sector as falling oil prices have crimped spending by big oil
groups.
CGG, a Paris-listed specialist exploration company, said it has
rejected the offer. "Conditions to pursue [the approach] weren't
met," the company said in a statement Thursday.
The move by Technip comes just days after U.S. giant Halliburton
Co. announced plans to buy small rival Baker Hughes Inc. in a deal
valued at $34.6 billion, prompting speculation that more deals in
the sector were in the offing.
The industry's main players are rushing into swallowing smaller
rivals to mitigate the effects of falling oil prices on their
business, which comprises providing equipment such as rigs, drill
parts and tools, as well as the engineering for pipelines and
projects. As oil prices have fallen to below $80 a barrel from more
than $100 a barrel earlier this year, major oil companies have
shelved expansion plans for multibillion-dollar projects and shed
operations with thin profit margins.
Technip provides an array of services from offshore drilling
equipment to oil refining, while CGG focuses on seismic studies and
other techniques to help energy companies locate oil and gas
reserves.
The combined group would employ around 50,000 people with
revenue of around EUR13 billion.
Technip, which said it first approached CGG on Nov. 10, has
offered EUR8.3 a share in cash, a premium of 27% over CGG's closing
share price Wednesday.
CGG shares shot up more than 22% in early trading, but at
EUR7.91, they were trading below Technip's offer price. Shares of
Technip were down 4.3%.
Write to Inti Landauro at inti.landauro@wsj.com
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