Oil and gas service provider TechnipFMC has announced a plan to split the company into two independent public companies.
The company, which is the result of a 2017 merger between Technip and FMC Technologies, plans to divide into RemainCo, a fully-integrated technology and services provider, and SpinCo, an engineering and construction (E&C) player.
TechnipFMC believes the separation would enhance both RemainCo’s and SpinCo’s focus on their respective strategies and provide improved flexibility and growth opportunities.
The transaction is expected to be structured as a spin-off of TechnipFMC’s onshore/offshore segment to be headquartered in Paris, France.
“Since the creation of TechnipFMC, we have pioneered the integrated business model for subsea and transformed our clients’ project economics. To further enhance value creation, our Board of Directors and management team have continuously evaluated strategic options and, after a comprehensive review, determined that it is in the best interest of TechnipFMC and all of our stakeholders to create two diversified pure-play leaders. We are confident that the separation would allow both businesses to thrive independently within their sectors, enabling each to unlock significant additional value,” said Doug Pferdehirt, Chairman and CEO of TechnipFMC.
The separation is expected to be completed in the first half of 2020, subject to customary conditions, consultations and regulatory approvals.
“This move shows that TechnipFMC is a forward-thinking company with the ability to shape the business environment it operates in. The successful integration of FMC Technologies into the Technip organization in 2017 was impressive in its own right, creating a leading subsea entity on the global stage. Then to turn around two years later and manifest the value creation by splitting the company in two, is truly remarkable,” commented Audun Martinsen, head of oilfield service research at consulting firm Rystad Energy.
“With SpinCo, TechnipFMC is seeking now to become a much more focused company. We have not yet seen large-scale synergies resulting from combining subsea and surface capabilities. With this move, TechnipFMC will go in the opposite direction of its now fully-fledged competitor McDermott, which acquired Chicago Bridge & Iron Company (CB&I) last year,” Martinsen added.