Saipem, the Italian energy services company, is reportedly on the verge of merging with the Norwegian firm Subsea 7, aiming to create a new giant in the energy sector valued at over 18 billion euros. This significant development marks another attempt at merging these two companies, as Saipem failed to secure the merger previously back in 2019. This time, the merger discussions are said to be more advanced, potentially due to renewed efforts under Saipem's recently appointed CEO, Alessandro Puliti.
According to reports from Repubblica, the boards of directors for Saipem’s main shareholders—Eni and Cassa Depositi e Prestiti (CDP)—are scheduled to convene extraordinary meetings to discuss the merger. Eni holds approximately 21.19% of Saipem, whereas CDP controls around 12.82%. If both boards give their approval, it will set the stage for the merger to proceed.
By merging, Saipem and Subsea 7, both publicly traded companies with nearly equal market capitalizations, would form a substantial force within the oil and gas services industry, also positioning themselves favorably within the renewable energy sector. Analysts believe the merger could result not only in operational synergies, enhancing cost efficiencies, but also bolster their market share.
Subsea 7, recognized for its expertise in offshore oil and gas installations, has already initiated collaborations with Saipem, particularly on wind energy projects, indicating existing cooperation between the two firms. The merger is anticipated to create significant operational alignments, especially when considering the dual focus on traditional oil and gas services alongside commitments to transitioning energy solutions.
The potential union arrives at a pivotal moment for Saipem. The company has faced tumultuous periods leading to substantial losses, including warnings from its former CEO with regard to profit expectations. The recent leadership change to Alessandro Puliti has ignited speculative optimism, highlighting his vision for Saipem’s recovery which includes targeting 50 billion euros worth of orders over the next few years.
The financial markets are leaning toward optimism with both companies’ alliance, as it could mean substantial growth and sustainability moving forward. Financial analysts suggest the merger could lead to improved margins and reduced overhead costs, both beneficial for shareholders. According to sources, the new consolidated entity would result in substantial revenue influx, potentially exceeding the figures generated individually by each company prior to the merger.
Subsea 7, meanwhile, maintains various institutional stakeholders, with Kristian Siem holding 23.9% and the pension fund Folketrygdfondet at 9.5%. Such ownership stakes set up complex dynamics going forward, especially concerning decision-making processes as both companies seek to align operational strategies under the new corporate umbrella.
While many industry experts highlight the potential benefits, questions remain about the integration process and the scalability of operations. Merging two distinct corporate cultures can often result in unforeseen hurdles; hence, how well the leadership manages transitions will be key to the success of the new consortium.
Despite prior difficulties, the renewed attempts by Saipem to join forces with Subsea 7 show a strategic pivot aimed at addressing competitive pressures and anticipating industry transformations, particularly as the energy sector navigates through global shifts toward sustainable and renewable energy sources.
With discussions underway, the energy markets are keeping a close watch. Investors and stakeholders are eager to see whether this merger will materialize, significantly impacting the energy services space and setting the tone for future consolidations within the industry.