TechnipFMC plc (NYSE: FTI) (Paris: FTI) on Monday said is its Board of Directors had unanimously approved its plan to separate into two industry-leading, independent, publicly traded companies: RemainCo, a fully-integrated technology and services provider, continuing to drive energy development; and SpinCo, a leading engineering and construction (E&C) player, poised to capitalize on the global energy transition.
TechnipFMC said the separation would enhance both RemainCo’s and SpinCo’s focus on their respective strategies and provide improved flexibility and growth opportunities.
The transaction is expected to be structured as a spin-off of TechnipFMC’s Onshore/Offshore segment to be headquartered in Paris, France. The separation is expected to be completed in the first half of 2020, subject to customary conditions, consultations and regulatory approvals, at which time all outstanding shares of SpinCo will be distributed to existing TechnipFMC shareholders.
The 2017 merger of Technip S.A. and FMC Technologies, Inc. created a new subsea leader and established TechnipFMC as the only fully integrated subsea provider. TechnipFMC has redefined subsea economics through its integrated model and accelerated technology development and innovation. At the same time, the company said its Onshore/Offshore business has consistently demonstrated operational excellence, successfully delivered landmark projects, built an unprecedented backlog, and positioned itself to continue capitalizing on growing demand for liquefied natural gas (LNG).
“The exceptional performance of TechnipFMC since the merger has made the proposed spin-off possible and, when completed, will enable the two companies to unlock additional value,” TechnipFMC said in a statement.
Doug Pferdehirt, Chairman and CEO of TechnipFMC, stated, “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.”
TechnipFMC said while it awaits receipt of all final approvals, the company and its employees will remain focused on delivering operational excellence and world-class service to its clients. The transaction is expected to be tax free to certain shareholders where permissible, including the United States.
The company has been awarded contracts by ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. for the engineering of the subsea systems for the Liza Phase 1 and 2 Development projects.