October 2019, Vol. 246, No. 10


TechnipFMC to ‘De-Merge’ into Independent Companies

P&GJ Staff Report

Less than three years after Technic merged with FMC Technologies to create a $20 billion offshore services company, London-based TechnipFMC said it will separate into two independent, publicly traded companies to focus on their respective strategies. 

(Photo: TechnipFMC)
(Photo: TechnipFMC)

The new companies will not split exactly along pre-2017 merger lines, but into an upstream-oriented technology and services business and a mid/downstream engineering and construction company.

The “de-merger” is expected to be completed in the first half of 2020 as a spin-off of TechnipFMC’s Onshore/Offshore segment, with headquarters in Paris.

“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,” said Doug Pferdehirt, chairman and CEO of TechnipFMC.

“We are confident that the separation would allow both businesses to thrive independently within their sectors, enabling each to unlock significant additional value,” Pferdehirt said.

Mhairidh Evans, principal analyst at consultant Wood Mackenzie, described the split as a “bold move” by TechnipFMC and predicted it may lead to further merger and acquisition activity.

“The de-merger provides focus and flexibility for each of its divisions, which were already fairly distinct,” Evans said.  “For example, we’d expect the subsea division to build on its market leadership – perhaps by considering other acquisitions or strategic directions that the wider TechnipFMC couldn’t support.”

After spinoff, the engineering and construction company would have about 15,000 employees.  It would benefit from its leadership position in the downstream market, TechnipFMC said.  

The company would comprise the Onshore/Offshore segment, including Genesis, and also would include Loading Systems and Cybernetix, which have been a part of the Surface Technologies and Subsea businesses, respectively.

The engineering and construction spinoff – referred to as “SpinCo” in transaction documents – will be led by Catherine MacGregor, now TechnipFMC’s president of New Ventures, as CEO. Bruno Vibert will serve as chief financial officer, and Marco Villa be chief operating officer for the company, to be incorporated in the Netherlands and based in Paris.

Pferdehirt will continue as CEO for the remaining, upstream-focused company, to be based in Houston with a workforce of about 22,000. The company, called “RemainCo” in transaction documents, will focus on capital intensive subsea technologies and services.

“As TechnipFMC has transformed the industry through its pioneering, integrated model in Subsea,” the company said, its remaining company “will apply the same winning formula to Surface Technologies.”

The names of the two companies following spin-off were not disclosed.

The mid- and downstream company, Evans said, “has a longer-term horizon, and is less capital- and asset-intensive than its upstream counterpart.

“It’s also a deliberate sidestep away from the upstream cycle, toward the energy transition,” she added, “which is notable coming from one of upstream oil and gas’ oilfield services’ giants.”  P&GJ

Related Articles


{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}