Technip announced today that it has completed the acquisition of Global Industries, Ltd. The shareholders of Global Industries approved the merger at a special shareholders meeting held on November 30, 2011 and will receive US$8.00 per share in cash. Global Industries has become an indirect, wholly-owned subsidiary of Technip and trading of its shares will be suspended after NASDAQ closes today.
The completion of the merger will allow the integration of Global Industries into Technip to begin, thus benefiting Technip's and Global Industries' employees and clients, who have been very supportive of the transaction.
The initial integration planning carried out since the announcement has confirmed the rationale for bringing Technip's subsea activities and those of Global Industries together.
- Global Industries brings its complementary subsea know-how, assets and experience, to Technip, notably including two newly-built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.
- Technip's global presence, world-class technologies, assets, services and strong project management track record will realize the full value and potential of Global Industries' know-how, assets and experience, and broaden opportunities for Global Industries' employees.
- The acquisition of Global Industries reinforces Technip's leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip's current capabilities and expand its addressable market by approximately 30% in deep-to-shore subsea infrastructure. Several projects have already been identified and are expected to materialize in the medium-term.
- Technip sees additional opportunities in the Offshore segment, with Global Industries talent, know-how and leading edge units, particularly in the heavy lift business.
The merger was completed ahead of schedule. In 2012, Technip will focus on the integration and deployment of Global Industries' teams and assets to secure order intake.
Technip intends to provide additional details on the integration process and associated first year costs, as well as its financial outlook, during the presentation of its 2011 full year results on February 16, 2012.
In 2013, the transaction is expected to be accretive to Technip's earnings per share by around 5 to 7%, reflecting the first revenues from combined projects and the implementation of at least US$30 million in cost synergies. Thereafter, with further accretion, overall returns are expected to be in line with Technip's subsea hurdle rate of 15% ROCE over a business cycle.
The acquisition will be financed using Technip's existing cash deposits and short-term borrowings. On November 18, 2011, Technip has also signed a US$1.1 billion 2-year multi-currency bank facility which provides additional financial flexibility.
Thierry Pilenko, Chairman and Chief Executive Officer of Technip, said: "I am delighted that we can now welcome the teams of Global Industries to Technip, having completed this merger ahead of schedule. Combining the strengths of two world-class teams will allow us to seize the exciting opportunities that lie ahead notably by handling a broader scope of projects. Our priority is now to quickly and smoothly integrate the teams from Global Industries that it has been a pleasure to start to get to know over the last 2 ½ months, so that our combined teams can focus on winning and executing projects, thus delivering greater value for both our customers and our shareholders."