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TechnipFMC to separate into two companies

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LNG Industry,

TechnipFMC plc has announced that its board of directors has unanimously approved its plan to separate into two industry-leading, independent, publicly traded companies: RemainCo and SpinCo.

According to the statement, it is expected that the transaction will be structured as a spin-off of TechnipFMC’s Onshore/Offshore segment to be headquartered in Paris, France. The separation is expected to be finalised in the 1H20, subject to customary conditions, consultations and regulatory approvals, at which time all outstanding shares of SpinCo will be distributed to existing TechnipFMC shareholders.

TechnipFMC claims that its exceptional performance since the merger (Technip S.A. and FMC Technologies Inc.) in 2017 has made the proposed spin-off possible and, when completed, will allow the two companies to unlock additional value.

Doug Pferdehirt, Chairman and CEO of TechnipFMC, said: “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.”

SpinCo would have around 15 000 employees, and would be one of the world’s largest E&C pure-plays, well placed to capitalise on the global energy transition. The company would be uniquely positioned to capture LNG opportunities as a result of its robust project delivery model, demonstrated capabilities and proven track record. In addition to this, the new company will benefit from its leadership position in the downstream market, as well as future growth opportunities in biofuels, green chemistry and other energy alternatives. SpinCo would consist of the onshore/offshore segment, including Genesis – a leader in front-end engineering and design (FEED). SpinCo would also include Loading Systems, a leader in cryogenic material transfer products, and Cybernetix, a technology leader in process automation, that have historically been a part of the Surface Technologies and Subsea businesses, respectively.

RemainCo, meanwhile, will have around 22 000 employees, and will be a fully integrated technology and services provider, continuing to drive energy development. The company’s goal will be to support customers in the delivery of unique, integrated production solutions. Just as TechnipFMC has served the industry through its pioneering, integrated model in Subsea, RemainCo will apply the same winning formula to Surface Technologies. As a standalone company, it will be the largest diversified pure-play in the industry.

According to the statement, the successful completion of the spin-off is subject to general market conditions and regulatory approvals, as well as consultation of employee representatives, where applicable, and final board approval.

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