Subsea 7 (SUBC) M&A Announcement summary

Deal rationale and strategic fit

• The merger aims to create a global leader in energy services, offering comprehensive offshore and onshore solutions across oil, gas, carbon capture, and renewables, leveraging complementary fleets, geographies, and client bases.

• The combined entity will have over 45,000 employees in 60+ countries and a diversified fleet of 60+ construction vessels, enhancing project execution and innovation.

• The merger is driven by the need for scale to address increasingly large and complex projects and to better serve clients with integrated solutions.

• The combined offering includes SURF, conventional trunklines, offshore wind, and sustainable infrastructure, with a focus on innovation and technology.

• Both companies' largest shareholders, including Eni, CDP Equity, and Siem Industries, support the transaction.

Financial terms and conditions

• Subsea7 shareholders will receive 6.688 Saipem shares for each Subsea7 share, resulting in a 50/50 pro forma ownership split.

• Subsea7 shareholders will receive a €450 million extraordinary dividend prior to completion.

• The combined company will be listed on the Milan and Oslo stock exchanges.

• The combined backlog is €43.3 billion, with revenue of €20 billion and EBITDA over €2 billion as of September 2024.

• At least 40% of free cash flow (post-lease liabilities) will be distributed as dividends post-merger.

Synergies and expected cost savings

• Annual cost and CapEx synergies are estimated at €300 million by the third year post-completion, mainly from fleet optimization, procurement, and process efficiencies.

• One-time costs to achieve synergies are estimated at €270 million, to be realized over three years post-merger.

• Revenue synergies are anticipated from improved fleet utilization and reduced transit times, though not quantified.