The Italian energy infrastructure company Saipem and
the Norwegian Subsea7 have announced a merger, creating a new industry leader
named Saipem7. The deal, signed on Sunday, will result in a combined entity
with an aggregated order backlog of €43 billion, annual revenues of
approximately €20 billion, and an EBITDA of over €2 billion. The new company
will employ 45,000 people, including 9,000 engineers. Shareholders of both
Saipem and Subsea7 will hold equal stakes in the new entity, with Subsea7
shareholders receiving 6.688 Saipem shares per each of their own. Additionally,
Subsea7 will distribute a special dividend of €450 million. While the deal has
been positively received by analysts, market reactions have been mixed, with
Saipem’s stock initially surging before reversing into negative territory on
the Milan Stock Exchange, while Subsea7’s shares in Oslo saw a 6.1% increase.
Italy’s Minister of Economy, Giancarlo Giorgetti,
praised the agreement, stating that it demonstrates how public sector
involvement can enhance major industrial operations, creating a global leader
in energy engineering based in Milan. Saipem is 12.82% owned by Cassa Depositi
e Prestiti, while Eni, in which the Italian government also holds a stake, owns
21.9% of the company. The merger comes as a natural progression from a
strategic partnership announced in February 2023, when Saipem CEO Alessandro
Puliti revealed a collaboration with Seaway7, a subsidiary of Subsea7, focusing
on offshore wind farm foundation projects. At the time, he emphasized that
offshore wind had become a cornerstone of Saipem’s energy transition strategy,
despite previous challenges that led to a €2.4 billion loss in 2021 due to cost
overruns on North Sea projects. Since then, Saipem and Seaway7 have been
jointly assessing and developing projects, paving the way for this full-scale
merger.
Subsea7, led by chairman Christian Siem, has its
largest stakeholders in Siem himself (23.9%) and Norway’s pension fund,
Folketrigtfonde (9.5%). Analysts at Barclays have described the deal as the
creation of a “powerhouse for offshore construction”, expecting annual
synergies of €300 million. The combined company will benefit from a larger and
more diversified fleet, allowing for more efficient operations and global
project optimization. Additionally, both companies have committed to distributing
up to $350 million in 2025, alongside the €450 million pay out to Subsea7
shareholders, which is expected to be well received by the market.
Experts at Mediobanca highlight the merger’s strategic
rationale, noting that it will strengthen the offshore engineering and
construction sector by consolidating expertise, assets, and operational
capabilities. The reduction in market competitors with long-standing industry
track records is expected to enhance revenue synergies. Meanwhile, analysts at
Jefferies see the move as a “positive step”, as the increasing demand
for energy services in the oil sector requires both technical expertise and
financial strength to remain competitive with U.S. counterparts.
