TechnipFMC to Split into Two: Update

(Adds comment from Woodmac)

UK-registered TechnipFMC plans to separate into two independent and publicly traded companies, it said August 26. One entity, RemainCo, will function as a fully-integrated technology and services provider while the other, SpinCo, will function as an engineering and construction player.

“The separation would enhance both RemainCo’s and SpinCo’s focus on their respective strategies and provide improved flexibility and growth opportunities,” TechnipFMC said.

The transaction is expected to be structured as a spin-off of TechnipFMC’s onshore/offshore segment to be headquartered in Paris, France. The separation is expected to be completed in the first half of 2020, subject to various approvals, at which time all outstanding shares of SpinCo will be distributed to existing TechnipFMC shareholders, the company said.

The split comes almost three years after the merger of Technip and FMC Technologies, which established TechnipFMC as the only fully-integrated subsea provider.

“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,” TechnipFMC CEO Doug Pferdehirt said.

Pferdehirt will serve as CEO of  RemainCo. The company will remain incorporated in the UK with headquarters in Houston and listed on both the NYSE and Euronext Paris exchange.

Catherine MacGregor, who currently serves as TechnipFMC’s president, New Ventures, will serve as CEO of SpinCo. The company will be incorporated in the Netherlands with its headquarters in Paris and listed on the Euronext Paris exchange. 

Wood Mackenzie said it was a "bold move," one with an eye on the longer game ahead. It "provides focus and flexibility for each of its divisions, which were already fairly distinct," it said. RemainCo, the more pure-play upstream company, is already a market leader in subsea, while Spinco is a mid/downstream company with a longer-term horizon, and less capital- and asset-intensive than its upstream counterpart. It’s also is a deliberate sidestep away from the upstream cycle, towards the energy transition, which is notable coming from one of upstream oil and gas’ oilfield services’ giants.”