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TechnipFMC votes to split into two companies

28 Aug 2019 2:15 PM | Sonia Harvey (Administrator)

GLOBAL oilfield service provider and tech developer TechnipFMC will separate into two independent, publicly-traded companies following a unanimous decision by the board of directors.

It has been two years since the formation of TechnipFMC following an initial merger of Technip and FMC Technologies, however on Monday the company said it would spin off its engineering and construction operations into a separate company called SpinCo.

SpinCo will focus on LNG, downstream and petrochemicals, building on the legacy Technip position in those areas.

The second company, RemainCo, will be a technology and services provider focused on energy development.

According to analysis from Wood Mackenzie, the demerger is a "bold move" that is less about ‘correcting' something but a "proactive positioning move for a longer-term market shift."

"The upstream company, termed RemainCo for now, will be in essence, the legacy FMC Technologies' equipment and services business, plus Technip's subsea, umbilical, riser and flowline manufacturing business," WoodMac principle analyst Mhairidh Evans said.

"The demerger provides focus and flexibility for each of its divisions, which were already fairly distinct. We'd expect the subsea division to build on its market leadership - perhaps by considering other acquisitions or strategic directions that the wider TechnipFMC couldn't support."

Source: Energy News Bulletin

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