Schlumberger (NYSE:SLB), Aker Solutions (OSLO:AKSO) and Subsea 7 (OSLO:SUBC) have announced an agreement to form a new joint venture focused on subsea technology and services.
The deal would see Schlumberger and Aker Solutions merger their subsea businesses, while Subsea 7 would join the new unit as an equity partner.
Both offer a suite of services spanning engineering design, technology, manufacturing and life-of-field solutions.
The agreement will bring together technologies such as subsea gas compression, electric subsea production systems and other electrification solutions that can help operators meet decarbonisation goals, the trio said.
The combined business would oversee around 9,000 employees globally, and the firms suggest they could achieve synergies of more than $100 million per year over the medium term.
In addition to contributing its subsea business to the joint venture, at closing Schlumberger intends to issue common stock shares valued at $306.5 million to Aker Solutions in a private placement.
Concurrently, Subsea 7 will purchase its 10% interest in exchange for $306.5 million in cash to Aker Solutions. The venture also will issue a promissory note to Aker Solutions for $87.5 million.
At closing, Schlumberger will own 70%, with Aker Solutions owning 20% and Subsea 7 owning 10%.
The transaction is subject to regulatory approvals and is expected to close in the second half of 2023.
Schlumberger said it will name a CEO and CFO for the new unit after the transaction has closed.
Aker Solutions said completion of the deal would leave it with “a large and significant business comprising the EMM- and Renewables & Field Development segments” which would deliver revenues of around NOK 25 billion ($25bn) in 2022.
It also expects to recognise a one-off gain of around $1 billion in the wake of the transactions.
Once completed, the existing Subsea Integration Alliance (SIA) between Schlumberger and Subsea 7 will be amended so that the new company will assume Schlumberger’s role in the SIA, which will be renewed for a ten-year term.
“As investment in the offshore market – particularly in deepwater – continues to increase, our customers will benefit from enhanced services that leverage digital and technological innovation to drive improved subsea asset performance while increasing energy efficiency and reducing CO2 emissions,” said Schlumberger chief executive Olivier Le Peuch.
“We look forward to collaborating with both Aker Solutions and our subsea integration partner Subsea 7 on this new venture.”
“Aker Solutions, Schlumberger and Subsea 7 are complementary businesses, both in terms of products and services, as well as customers and geographical presence. Furthermore, Schlumberger shares our commitment to innovation, such as deploying digital solutions and decarbonization technologies,” added Aker Solutions president and CEO 0yvind Eriksen.
“We are excited to build on our highly successful alliance with Schlumberger and partnership with Aker Solutions. This new joint venture is a critical step as we collaborate on integrated subsea projects that drive maximum value for our customers,” said Subsea 7 CEO John Evans.
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