The UK-based TechnipFMC will split its business into two separate publicly traded companies in a move to unlock additional value for the respective segments

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TechnipFMC will split its business into two separate publicly traded companies (Credit: TechnipFMC plc)

Oilfield services provider TechnipFMC is set to spin off its engineering and construction (E&C) division into a separate firm to capitalise on the global energy transition while enhancing value creation.

TechnipFMC will split its current business into two separate publicly traded companies – RemainCo and SpinCo. The business separation is expected to improve the new companies’ focus on their respective strategies and give them better flexibility and growth opportunities.

TechnipFMC to spin off its onshore/offshore segment

The transaction will be structured as a spin-off of TechnipFMC’s onshore/offshore segment, which will be headquartered in Paris. The separation is likely to be concluded in the first half of next year, subject to customary conditions, consultations and regulatory approvals.

According to TechnipFMC, the merger of Technip and FMC Technologies in 2017, which resulted in its creation as a new subsea player has established it as the only fully-integrated subsea provider. The company’ said that its performance since the merger has made the proposed spin-off possible which when completed will help the two firms to unlock additional value.

The two new companies RemainCo and SpinCo will have distinct and expanding market opportunities and also specific customer bases, said the oil services provider.

SpinCo is expected to become one of the largest E&C pure-play companies in the world, and will be able to capture LNG opportunities owing to its strong project delivery model, proven track record, and demonstrated capabilities, said TechnipFMC.

The new company will be made up of TechnipFMC’s onshore/offshore segment, which includes Genesis, a provider of front end engineering and design services. SpinCo would also include Loading Systems and Cybernetix.

RemainCo, on the other hand, will be made up of the technology and services business of the company. It will continue to support TechnipFMC’s clients in the delivery of integrated production solutions with a workforce of around 22,000 employees.

TechnipFMC chairman and CEO Doug Pferdehirt said: “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.”