TechnipFMC, the Franco-US energy engineering business, has re-started the process of spinning off Technip Energies, one of the world’s leading LNG project engineers, and has already put several financial transactions in place to complete the operation in the next couple of months.
Technip Energies is one of the leading engineering, procurement and construction companies and its current project portfolio includes Russia's Arctic LNG II proposed for the Gydan Peninsula in Siberia and the Mozambique LNG venture in southeast Africa.
Parent company TechnipFMC first said in August 2019 that it had decided to spin off its European-based engineering and construction operations into a separate business, leaving the Houston-based half of the firm as a technology-focused equipment supplier to the oil and gas and subsea sectors.
The strategy was to reverse the 2017 merger of Technip of France and FMC Technologies of the US, a transaction valued at the time at $20Bln as it created TechnipFMC as a fully-integrated subsea and onshore provider.
TechnipFMC has now said that the separation would occur by means of a spin-off of 50.1 percent of the outstanding shares of Technip Energies common stock “pro rata” to TechnipFMC shareholders.
French export credit agency Bpifrance intends to invest $200 million in Technip Energies by acquiring shares from TechnipFMC to become a long-term reference shareholder in the spin-off.
TechnipFMC explained that Technip Energies would then be listed on the Euronext Paris stock exchange with American depositary receipts (ADRs).
“Separation is expected to be completed in the first quarter of 2021,” stated TechnipFMC.
The parent company added that it intended to conduct “an orderly sale of its stake” in Technip Energies. “We are very excited to announce the resumption of activities related to the separation and the creation of two industry-leading diversified pure-play companies poised to capitalize on the energy transition,” said Doug Pferdehirt, Chairman and Chief Executive of TechnipFMC.
“The increased clarity we now have in the market outlook coupled with our demonstrated ability to successfully execute projects in this most challenging period give us confidence to move forward with the separation,” added the CEO.