Global energy service firm TechnipFMC has announced it will split the company into two separate business entities.
The company’s board unanimously voted to separate the firm into technology and service company, RemainCo, and engineering and construction firm, SpinCo.
TechnipFMC said the split would allow the company to improve “flexibility and growth opportunities” and “enable the two companies to unlock additional value”.
The separation is expected to be completed in the first half of 2020.
It is currently unclear where exactly Technip’s Aberdeen business will fall in the separation, but it is understood that subsea work will come under RemainCo, while all onshore and offshore work, including renewable energy work, will fall under SpinCo.
The firm said it was able to undertake the split due to the “success” of its subsea delivery.
SpinCo will take 15,000 employees, while RemainCo will have 22,000 workers.
But one insider said the deal was “not designed to destroy jobs”, adding: “we need all our people”.
Doug Pferdehirt, chairman and CEO of TechnipFMC, said: “Since the creation of TechnipFMC, we have pioneered the integrated business model for subsea and transformed our clients’ project economics.
“To further enhance value creation, our Board of Directors and management team have continuously evaluated strategic options and, after a comprehensive review, 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.”
More to follow…