Saipem and Subsea7: A Merger of Energy Services Giants

In a strategic move that could reshape the global energy services landscape, Italian oil services company Saipem and Norwegian rival Subsea7 have reached an agreement in principle to merge, creating a global leader in energy services. The proposed combination, expected to be completed in the second half of 2026, will result in a combined company named Saipem7, with a combined backlog of €43 billion, revenue of approximately €20 billion, and EBITDA in excess of €2 billion.

The merger is expected to deliver significant synergies, with annual synergies of approximately €300 million anticipated to be achieved in the third year after completion. These synergies will be driven by fleet optimization, procurement, sales and marketing, and process efficiencies. The combined company will have an expanded and diversified fleet of more than 60 construction vessels, enhancing its ability to undertake a wide range of projects, from shallow water to ultra-deepwater operations.

The merger will also create a more efficient capital investment program, with an optimized allocation of capital across a broader, complementary vessel fleet. Additionally, Saipem7 is expected to pay a dividend of at least 40% of Free Cash Flow after repayment of lease liabilities, ensuring an attractive shareholder remuneration policy.

The strategic rationale behind the proposed combination is compelling, as Saipem and Subsea7 are highly complementary in terms of market offerings and geographies. The combined company will be able to provide comprehensive solutions for clients in oil, gas, carbon capture, and renewable energy, with a talented global workforce of over 45,000 people, including more than 9,000 engineers and project managers. This merger is expected to enhance value for shareholders and all stakeholders, both in the current market and in the long term.

In conclusion, the proposed merger of Saipem and Subsea7 is a strategic move that could significantly impact the global energy services market. The combined company, Saipem7, will possess an extensive global reach, a diversified fleet of construction vessels, and a talented workforce, enabling it to provide comprehensive solutions for clients across the energy spectrum. With expected synergies and an attractive shareholder remuneration policy, this merger is poised to create significant value for shareholders and stakeholders alike. As the merger progresses, investors should closely monitor the developments and assess the potential implications for the energy services sector.