CGGVeritas acquires Fugro Geoscience division

Jean George MalcoParis-based CGGVeritas has an agreement to purchase Fugro’s geoscience division, excluding the existing multi-client library and nodes businesses, for €1.2 billion (US$1.6 billion) cash.  The gross amount of the transaction is €1.2 billion, to be paid in cash and will be financed with 1/3 of equity and 2/3 from debt and Seabed joint venture share proceeds. CGGVeritas expects the purchase to be completed by year’s end.

“With an expanded technology portfolio, a stronger industry position and our combined expertise, we will create an integrated company with leading capabilities in geoscience, equipment, and acquisition,” Jean George Malco, CEO of CGGVeritas, said.

CGGVeritas will add four seismic survey vessels to its fleet through transaction and the company aims to be a fully integrated geoscience company. Fugro now intends to concentrate on geotechnical, subsea, survey and seabed joint venture activities.

The agreement includes other strategic partnerships between the two companies, capitalizing on their respective strengths. This includes Seabed Geosolutions, a company offering seabed seismic and non-seismic solutions that was created as a JV between the two companies earlier this year. Fugro will acquire 60% of Seabed as outlined in the agreement after a payment of €225 (US$304 million). Global seismic surveying is seen as becoming more and more vital as more exploration continues further offshore.  

The reported price-to-earnings ratio was 7.8, coloring the transaction as a somewhat risky one.

Although the transaction has been approved by both companies’ boards of directors, its' completion is still subject to anti-trust and other customary conditions before closing.

Earlier this month, Fugro transferred ownership of its airborne activities to CGGVeritas as part of the transaction, a move that was first announced in January 2013.

Image of CGGVeritas CEO Jean George Malco, courtesy CGGVeritas

 

 

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