Saipem and Subsea7 have reached an agreement in principle on the key terms of a possible merger of the two companies through the execution of a memorandum of understanding (MoU). The combined company would be renamed Saipem7 and have a combined backlog of more than $45 billion, revenue of approximately $20 billion, and a global organization of over 45,000 people, including more than 9,000 engineers and project managers.
The combined company would be structured into four businesses: offshore engineering and construction, onshore engineering and construction, sustainable infrastructures, and offshore drilling. The offshore engineering and construction business will be incorporated in an operationally autonomous company named Subsea7. To be headquartered in London, it will comprise all of Subsea7’s business and the asset-based services business of Saipem. In line with Saipem’s previous strategy, onshore engineering and construction will operate with a focus on reducing overall risk and maximizing profitability. The sustainable infrastructures business will aim to consolidate its presence in the Italian market with potential expansion overseas. The offshore drilling division will seek to continue to maximize its EBITDA and cash flow.
It is envisaged that current Saipem CEO Alessandro Puliti will be appointed as CEO of the combined company while current Subsea7 CEO John Evans will be the CEO of the offshore business of the combined company.
Completion of the merger is anticipated to occur in the second half of 2026.
The transaction is expected to deliver annual synergies of more than $300 million in the third year after completion, with one-off costs of approximately $280 million.
The combination would include a diversified fleet of more than 60 construction vessels to undertake a wide range of projects, from shallow-water to ultradeepwater operations, utilizing a portfolio of heavy lift, high-end J-lay, S-lay, and reel-lay rigid pipeline solutions, flexible pipe and umbilical lay services and wind turbine, foundation, and cable-lay installation capabilities.
The MoU also provides for termination rights for each of Saipem and Subsea7 in connection with material findings in the context of due diligence, or upon payment of an unspecified breakup fee, should any of the companies wish to terminate the negotiations before entering into the merger agreement.
The parties aim to submit the final terms of the proposed combination to their respective Board of Directors for approval and to enter into the merger agreement around mid-2025.
