The Beginning Of The End, Or The End Of The Beginning For Technip?
Stephen Simpson, CFA
Stephen Simpson, CFA
Fri, May 20, 3:13 PM
- FMC Technologies (FTI -0.7%) is downgraded to Equal Weight from Overweight with a $33 price target, lowered from $37, at Barclays, which cites the upcoming merger with Technip (OTCQX:TKPPY).
- FTI investors need to consider that two-thirds of revenue will be driven from lump sum turnkey projects, exposure to construction risk and project cancellation, and structurally lower returns with more invested capital, the firm says.
- While Technip shareholders are hoping for a capital equipment multiple, FTI investors should be concerned about E&C multiples which traded at a near-50% discount to capital equipment from 2009-14.
- Now read FMC Tech investors "come out on the short end" in Technip merger, Citi says
Thu, May 19, 3:27 PM
- FMC Technologies (FTI -4%) is sharply lower following news of its merger with oilfield services rival Technip (OTCQX:TKPPY +5.6%), which Citigroup analysts say leaves FMC shareholders “on the short end” of the deal.
- "While half of the net present value of the synergies into perpetuity outweighs the premium paid to align ownership 50/50, we believe FMC shareholders come out on the short end as they should hold a majority of the combined entity due to a superior portfolio given the higher execution risk, margin volatility and outlook uncertainty [for Technip's]s E&C and Installation segments and FMC’s exposure to shale recovery within its onshore business," Citi says.
- Other analysts are more favorable: Canaccord says the merger would make the new company the “undisputed leader” in subsea project development, and Bernstein believes the deal is a step toward solving the industry’s endemic problem of high costs.
Thu, May 19, 4:12 AM
- Lower energy prices are continuing to drive consolidation in the oil services sector, with France's Technip (OTCQX:TKPPY) announcing an all-stock merger with U.S. rival FMC Technologies (NYSE:FTI).
- "We have complementary skills, technologies and capabilities," Technip CEO Thierry Pilenko declared. "Together, TechnipFMC can add more value across Subsea, Surface and Onshore/Offshore, enabling us to accelerate our growth."
- The transaction is expected to deliver annual pretax savings of at least $400M by 2019 and boost EPS significantly.
- FTI +2.4% premarket
Fri, Apr. 29, 6:56 AM
Thu, Apr. 28, 1:06 AM
Thu, Feb. 25, 1:26 AM
Dec. 10, 2015, 8:07 AM
- Technip (OTCQX:TNHPF, OTCQX:TKPPY) says it is not involved in any talks about strategic transactions, following reports that it was discussing a potential combination with FMC Technologies (NYSE:FTI).
- Reuters and Bloomberg had reported that the French oilfield services company is exploring a sale and has engaged in discussions with FMC Tech.
Dec. 9, 2015, 4:48 PM
- FMC Technologies (NYSE:FTI) +3.3% AH following reports that French oilfield services company Technip (OTCQX:TNHPF, OTCQX:TKPPY) is exploring a sale and has held talks with FMC over a possible merger.
- Negotiations between the two companies, who formed a joint venture earlier this year, are at an advanced stage and a deal reportedly could be announced before the end of this year.
- The deal could be structured as an inversion, which may allow Houston-based FMC to move its headquarters to a country with lower taxes.
- Combining FMC and Technip would bring together the largest provider of subsea equipment to the industry with Europe’s biggest oil services provider.
Jul. 7, 2015, 12:48 PM
- Technip (OTCPK:TNHPF, OTCQX:TKPPY) shares have dropped nearly 8% today after the French oil industry engineering and construction group repositions itself for a long slowdown with a restructuring plan in a cost-cutting program aimed at saving ~€830M ($914M), of which €700M is expected to be delivered in 2016.
- Technip's overhaul bodes ill for oilfield services companies, Heard On The Street's Helen Thomas writes, as questions linger about the chances for an imminent pickup in work for the industry.
- Technip's €650M of one-off restructuring charges is an unspecified amount related to standoffs with clients over payments on existing projects, which will spark existing worries about clients becoming more combative on pricing and raising doubts about how robust backlogs will prove, Thomas writes.
Jul. 6, 2015, 2:57 PM
- Technip (OTCPK:TNHPF, OTCQX:TKPPY) adds its name to a growing list of companies cutting payrolls in the oil and gas services sector this year, saying it will lay off ~6K workers as part of a major restructuring effort aimed at countering an oil and gas market the French company says will get even more challenging in coming months.
- Technip says its global overhaul will target savings of €830M ($919.6M), ~€700M of which will be delivered in 2016; the company expects to take €650M in one-off charges related to the restructuring.
- The company says it plans to reduce its presence through sales or closures and accelerate the reduction of its fleet size, downsizing to 23 vessels from 36 at the end of 2013.
Dec. 15, 2014, 7:45 AM
- CGG -31% in Paris trading after Technip (OTCQX:TKPPY) says it is abandoning its pursuit of the company and will not make an offer directly to investors.
- Last month, Technip offered to acquire the French oil services company for €1.46B ($1.82B) but CGG rejected the approach.
- The proposal would have combined Technip, which provides engineering and construction services to the energy industry, with CGG, a provider of equipment and geological data processing services to the sector.
Nov. 20, 2014, 12:47 PM
- CGG (CGG -5.3%) earlier confirmed it was approached by Technip (OTCPK:TNHPF, OTCQX:TKPPY) with an unsolicited offer - which it rejected - but in the view of Goldman Sachs analyst Henry Tarr, there is not a strong strategic rationale for a deal, and possible synergies are limited.
- Diversification can, as in the Halliburton-Baker Hughes tie-up, have merit, but this deal looks more expansionist than defensive, WSJ's Helen Thomas reports, as CGG’s seismic imaging and exploration services are largely separate from the actual construction of projects.
- Technip seems to be making a long-dated bet on a recovery in activity, Sanford C. Bernstein analysts say, but with the volatile seismic cycle approaching another trough, a deal could put pressure on earnings as fleets lie idle.
Nov. 20, 2014, 7:38 AM
- Technip (OTCPK:TNHPF, OTCQX:TKPPY) says it has made a preliminary takeover offer of €1.46B ($1.83B) for smaller French oil services company CGG, which says it rejected the offer.
- Technip, which says it first approached CGG on Nov. 10, has offered €8.3/share in cash, a 27% premium over CGG’s closing share price yesterday.
- CGG -6.6% premarket after surging more than 22% late yesterday after word of the deal was reported.
Nov. 19, 2014, 3:39 PM
- French seismic surveyor CGG (CGG +24.3%) soars after Bloomberg reports it is weighing a sale of the company after being approached by Technip (OTCPK:TNHPF, OTCQX:TKPPY).
- CGG is said to have rejected an initial offer from Technip as too low, but talks are continuing.
- The French government, whose fund owns stakes in both CGG and Technip, reportedly is pushing for a combination of the companies.
Apr. 16, 2014, 8:24 AM
- Energy group Total (TOT) has been busy awarding lucrative contracts since deciding Monday to go ahead with development of the Kaombo ultra-deep Angolan offshore project.
- A consortium of Technip (TNHPF, TKPPY) and Heerema Marine is awarded a $3.5B contract for underwater engineering work; Technip CEO Thierry Pilenko says the project is the largest subsea contract ever awarded to the company.
- Aker Solutions (AKKVF) earns a $2.4B contract for underwater pipeline fittings and equipment for vertical wells.
- Saipem (SAPMY) is awarded two contracts with a combined value of more than $4B involving engineering, procurement and production as well as commissioning offshore and onshore work for FPSO projects.
- TOT says the Kaombo field has estimated reserves of 650M barrels and should produce 230K bbl/day.
Dec. 18, 2013, 8:56 AM
- Technip (TNHPF, TKPPY) slumps more than 7% in London trading after announcing a profit warning based on downgraded forecasts for its subsea division.
- Technip now expects subsea revenues of €4.1B for 2013 vs. earlier guidance of €4.3B-€4.6B; next year, subsea operating margins will be "exceptionally low" in Q1 at ~5%, while margins for the remaining three quarters of 2014 should improve, allowing for a forecast operating margin of at least 12% for FY 2014.
Technip is a world leader in project management, engineering and construction for the energy industry.<br />From the deepest Subsea oil & gas developments to the largest and most complex Offshore and Onshore infrastructures, our 38,000 people are constantly offering the best solutions and most... More
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