Thursday 19 May 2016 2:46 pm

Oil services groups FMC Technologies and Technip to team up in $13bn deal

France's Technip and US rival FMC Technologies said today they would merge to create an oil services company worth $13bn (£8.9bn).

It comes as the industry has been enacting cost cuts to weather the oil price rout which has hit exploration and production. Technip and FMC expect the all-share deal to save at least $400m in annual costs by 2019.

The new group, TechnipFMC, will have a combined revenue of $20bn and more than 49,000 employees, giving it the potential to challenge oil services titans such as Halliburton and Schlumberger.

The deal is expected to complete in early 2017. Technip shares jumped 9.6 per cent in Paris this afternoon.

Doug Pferdehirt, president and chief operating officer of FMC Technologies, who will serve as the chief executive of TechnipFMC, said: "This transaction will allow us to deliver even greater benefits to our customers through a broadened portfolio that provides a unique set of integrated technologies and competences."

"We look forward to rapidly bringing together the outstanding employees and cultures of both companies, as well as the complementary capabilities of our organisations, to position the combined company at the forefront of a new generation of solutions for the oil and gas industry."

Technip has a market cap of around $6.2bn, while FMC Technologies is valued at about $13.5bn.

Goldman Sachs and Rothschild are acting as financial advisers to Technip. Evercore and Societe Generale are acting as financial advisers to FMC Technologies.