Aker Solutions, SLB, and Subsea 7 have closed the previously proposed transaction to create a subsea joint venture.
The new business, which will adopt the OneSubsea name, will drive innovation and efficiency in subsea production by helping customers unlock reserves and reduce cycle time, the companies said in a statement on Monday.
"OneSubsea now comprises Aker Solutions’ and SLB’s subsea businesses, which include an extensive complementary subsea production and processing technology portfolio, world-class manufacturing scale and capacity, access to industry-leading reservoir and digital domain expertise, unique pore-to-process integration capabilities and strengthened R&D capabilities," the companies said.
“By combining our strong and complementary competencies and technologies, we will deliver an industry step change that will benefit our customers and employees while significantly increasing shareholder value. For Aker Solutions, today also marks a defining moment in our strategy. We have transitioned from having a stand-alone subsea business to becoming a proud co-owner of a world-leading subsea company,” said Kjetel Digre, Chief Executive Officer of Aker Solutions.
Mads Hjelmeland, a Norwegian national previously SLB’s Director of Subsea Production Systems, has been appointed Chief Executive Officer of OneSubsea.
"OneSubsea’s extensive technology portfolio and engineering expertise enable us to address future market trends and needs at a unique scale. In doing so, we aim to fulfil our purpose of expanding the frontiers of subsea to drive a sustainable energy future,” said Hjelmeland. “We will accelerate innovation and contribute to the ambition of our customers to optimize their production and reduce emissions in their subsea operations.”
OneSubsea will be headquartered in Oslo, Norway, and Houston, Texas, with 11,000 people working in all key operating regions around the world.
Aker Solutions is a 20 percent owner in the joint venture, with SLB holding 70 percent and Subsea 7 holding 10 percent.
In addition, Aker Solutions receives a total consideration of USD 700 million for the sale of a 20 percent ownership in the joint venture, namely through receiving $306.5 million in proceeds from SLB settled in the form of 5,057,706 shares in SLB; receiving $306.5 million in proceeds from 10 percent divestment to Subsea 7 where $153.25 million of these have been settled in cash at closing and the remaining USD 153.25 million will be settled, with interest, at the latest on June 30, 2024; and receiving $87.5 million in proceeds from a vendor note from the JV to be paid, with interest, to Aker Solutions with minimum 50 percent one year from closing and the remainder within two years from closing.
"Aker Solutions has retained about USD 300 million in operational cash flow from the subsea business from the second quarter 2022 to date. The subsea joint venture will be an important contributor to Aker Solutions profits moving forward through the 20 percent ownership in a larger and stronger subsea company. The estimated synergy potential in the new joint venture is more than USD 100 million per annum in the medium term and the joint venture will have an attractive dividend policy," Aker Solutions said.
"Aker Solutions estimates 2023 revenues, excluding Subsea, to be about NOK 34 billion. This business has a solid order backlog of more than NOK 73 billion, providing strong visibility moving forward, and is well positioned to seize opportunities in rapidly changing energy markets," the company added.