Business
Saipem and Subsea7 Progress Merger Amid Saudi Asset Sale
Saipem and Subsea7 Progress Merger Amid Saudi Asset Sale
About this update from Saipem S.p.a.
Saipem SpA SAPMF has taken two significant steps in strengthening its long-term growth strategy. The company has secured regulatory approval in Brazil for its proposed merger with Subsea 7 S.A. SUBCY while simultaneously announcing the sale of its shallow-water drilling business in Saudi Arabia for $285 million. Together, these developments reinforce Saipem's commitment to building a stronger, more focused business positioned to capitalize on high-value offshore opportunities.Brazil Clears Subsea7-Saipem MergerBrazil's antitrust authority, CADE, has approved the proposed merger between Saipem and Subsea7, each carrying a Zacks Rank #3 (Hold) at present, without imposing any restrictions. The approval marks an important milestone for the combination of two leading offshore engineering and installation companies.The proposed merger aims to create a stronger organization capable of delivering comprehensive engineering, procurement, construction and installation services to customers worldwide. While the decision may still be appealed by interested parties, the regulatory clearance represents meaningful progress toward completing the transaction.The merger has attracted attention across the energy industry, with several major oil companies expressing concerns about potential market concentration. These companies argued that the combined business could gain significant bargaining power in offshore project execution. Despite these objections, Brazil's competition regulator concluded its review without requiring any conditions.Creating a Stronger Offshore BusinessThe combined company, expected to operate under the name "Saipem7," is designed to enhance operational capabilities and expand service offerings across global offshore markets.By bringing together complementary expertise, technologies and project execution capabilities, the merger is expected to improve efficiency while strengthening the company's ability to compete for increasingly complex offshore developments. As energy investment continues to grow across multiple regions, the combined organization will be better positioned to support customers with integrated engineering solutions.Saipem Sells Saudi Shallow-Water Drilling BusinessAlongside the merger progress, Saipem has signed a binding agreement to sell its entire stake in Saudi Arabian Saipem Limited (“SAS”) to ADES Saudi Limited Company, a subsi...