Aug 29 | 2019
Creation of Upstream, Downstream Businesses
Engineering services firm TechnipFMC has announced plans to split its operations as part of a major restructuring that will create separate upstream and downstream businesses.
Coming two years after the group was formed through the merger of Technip and FMC Technologies, the restructuring plan envisages “two industry-leading, independent, publicly traded companies”
The upstream company, presently named RemainCo, will be a fully-integrated technology and services provider; while the downstream company, SpinCo, will provide engineering and construction services “to capitalize on the global energy transition”
“After a comprehensive review, [we] 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,” said Doug Pferdehirt, CEO of TechnipFMC.
Bold Step
The move has been hailed as a significant restructuring that will improve focus and flexibility for each of the businesses.
“It is a bold move. We think it’s less about ‘correcting’ something that is not working today, rather with an eye on the longer game ahead. Essentially, the demerger is a proactive positioning move for a longer-term market shift,” said Mhairidh Evans, principal analyst, at Wood Mackenzie.
The transaction is expected to be completed in the first half of 2020 and will be structured as a spin-off of TechnipFMC’s Onshore/Offshore segment to be headquartered in Paris, France.
SpinCo and RemainCo
The newly formed SpinCo will have approximately 15,000 employees, and will be one of the largest E&C pure-plays. Covering the entire onshore/offshore segment, the company will comprise Genesis, a leader in front end engineering and design, as well as Loading Systems, a leader in cryogenic material transfer products, and Cybernetix, a technology leader in process automation. SpinCo will be incorporated in the Netherlands with its headquarters in Paris and listed on the Euronext Paris exchange.
RemainCo in contrast will have about 22,000 employees, and as a standalone company will be the largest diversified pure-play in the industry. RemainCo will be incorporated in the United Kingdom with headquarters in Houston and listed on both the NYSE and Euronext Paris exchange.
Coming two years after the group was formed through the merger of Technip and FMC Technologies, the restructuring plan envisages “two industry-leading, independent, publicly traded companies”
The upstream company, presently named RemainCo, will be a fully-integrated technology and services provider; while the downstream company, SpinCo, will provide engineering and construction services “to capitalize on the global energy transition”
“After a comprehensive review, [we] 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,” said Doug Pferdehirt, CEO of TechnipFMC.
Bold Step
The move has been hailed as a significant restructuring that will improve focus and flexibility for each of the businesses.
“It is a bold move. We think it’s less about ‘correcting’ something that is not working today, rather with an eye on the longer game ahead. Essentially, the demerger is a proactive positioning move for a longer-term market shift,” said Mhairidh Evans, principal analyst, at Wood Mackenzie.
The transaction is expected to be completed in the first half of 2020 and will be structured as a spin-off of TechnipFMC’s Onshore/Offshore segment to be headquartered in Paris, France.
SpinCo and RemainCo
The newly formed SpinCo will have approximately 15,000 employees, and will be one of the largest E&C pure-plays. Covering the entire onshore/offshore segment, the company will comprise Genesis, a leader in front end engineering and design, as well as Loading Systems, a leader in cryogenic material transfer products, and Cybernetix, a technology leader in process automation. SpinCo will be incorporated in the Netherlands with its headquarters in Paris and listed on the Euronext Paris exchange.
RemainCo in contrast will have about 22,000 employees, and as a standalone company will be the largest diversified pure-play in the industry. RemainCo will be incorporated in the United Kingdom with headquarters in Houston and listed on both the NYSE and Euronext Paris exchange.
