Aker Solutions ASA, Schlumberger and Subsea 7 have entered into agreements to form a Joint Venture (“JV”) to deliver a step change in subsea production economics by helping customers unlock reserves, reduce time to first oil and lower development costs while simultaneously delivering on their decarbonization objectives, according to Aker's release.
Aker Solutions and Schlumberger will contribute their subsea businesses into the JV which following the transactions will be owned by Schlumberger (70%), Aker Solutions (20%) and Subsea 7 (10%).
This combination brings together deep reservoir domain and engineering design expertise, an extensive field-proven subsea production and processing technology portfolio, world-class manufacturing scale and capabilities, and a comprehensive suite of life-of-field solutions to customers all over the world.
The transactions are interdependent and subject to regulatory approvals, as well as other customary closing conditions, and are expected to close during the second half 2023.
The transaction structure and terms – Aker Solutions will receive USD 700 million in consideration for the sale of a 20% ownership in the JV and retain a 20% ownership in the JV as follows:
USD 306.5 million in proceeds from Schlumberger which will be settled in the form of shares in Schlumberger. The shares will be settled based on the volume weighted average price for the ten trading days ending on the fifth trading day preceding closing of the transaction and is subject to a lock-up period of minimum 180 days
USD 306.5 million in proceeds from 10% divestment to Subsea 7 which will be settled in cash. USD 153 million of these will be settled at closing and the remaining USD 153.5 million will be settled, with interest, at the latest on June 30, 2024
USD 87.5 million in proceeds from a vendor note from the JV to be paid, with interest, to Aker Solutions with minimum 50% one year from closing and the remainder within two years from closing
Subsea Integration Alliance, currently an unincorporated alliance between Schlumberger and Subsea 7, will continue between the JV and Subsea 7. The alliance will be extended by 10 years from the closing date of the transaction
The Board of directors of the JV will consist of three representatives from Schlumberger, two from Aker Solutions and one from Subsea 7
The combined business will have approximately 9,000 highly skilled employees globally. Estimated synergy potential is more than USD 100 million per annum in the medium term, and the JV will have an attractive dividend policy
Each party will operate their businesses independently and in the normal course until closing. Based on a scenario where closing takes place in the fourth quarter of 2023, Aker Solutions will in addition to the value of the transactions retain an estimated USD 300 million of cash generation from its subsea business, for the seven quarters from second quarter of 2022 until end 2023.
Aker Solutions delivers integrated solutions, products and services to the global energy industry. Aker Solutions employs approximately 14,000 people in more than 20 countries.
Schlumberger is a technology company that partners with customers to access energy.
Subsea 7 is a one of the global leaders in the delivery of offshore projects and services for the energy industry. Subsea 7 makes offshore energy transition possible through the continuous evolution of lower-carbon oil and gas and by enabling the growth of renewables and emerging energy.