Two major companies involved in the subsea-engineering sector announced plans yesterday to create a group worth more than £3.6billion.
Acergy is buying Subsea 7 in an all-share deal to create a leader in undersea engineering and construction for the oil and gas industry.
The international firms, both listed on the Oslo stock exchange, both have big operations at Westhill, near Aberdeen.
Subsea 7 has nearly 1,000 working out of its north-east site, while Acergy has more than 500.
The companies are forecasting that the deal will lead to annual synergies of at least £67million, leading to fears that posts will go from the current worldwide workforce of 12,000.
No significant job losses are expected at Westhill, however. Some support posts could be under threat, but it is hoped that these workers could be redeployed elsewhere within the enlarged group.
The new business will be known as Subsea 7 and completion of the deal is anticipated by the first quarter of next year.
John Evans, chief operating officer at Subsea 7, who will continue in the same role, said the combination of the firms would lead to more opportunities for staff in a larger organisation.
He was unable to say if jobs would go at Westhill, because this would only be decided by an integration group one the deal had gone through. But he did point out that there was a continuing increase in subsea business around the world and both Subsea 7 and Acergy had been looking for additional operations and project staff.
Mr Evans also said there had been no decisions made yet on whether the new group would retain all the office space currently being used at Westhill.
Subsea 7 and Acergy revealed in October 2008 that they had been discussing a tie-up, but those talks ended without a deal.
Alistair Birnie, chief executive of industry body Subsea UK, said: “We welcome today’s announcement and hope that the new venture will create further stability in what is still a relatively difficult market sector.
“We believe there is a bright future for the new organisation which has two very strong management teams.
“There will inevitably be some rationalisation, but we would hope that any impact on jobs will not be significant.”
Acergy shareholders will have 54% of the combined group, while Subsea 7 shareholders will have the remainder.
Kristian Siem, the founder, chairman and biggest shareholder in Subsea 7 and who will become chairman of the combined business, will have about 20% of it through his investment vehicle Siem Industries. He said he had agreed irrevocably to vote in favour of the deal.
Chief executive of the new Subsea 7 will be Jean Cahuzac, the CEO of Acergy.
Analysts at Evolution Securities said: “Subsea 7 and Acergy have at long last agreed to join forces.
“We have long argued the logic of a deal, given it would create a subsea player which could provide the full host of services.”
Acergy is said to be strongest in west Africa and Asia, where Subsea 7 only has a limited presence, while its peer is strong in the North Sea and Brazil.