Saipem and Subsea7 to create €21bn energy services giant Saipem7

Saipem S.p.A. (BIT: SPM) and Subsea 7 S.A. (OB: SUBC) have signed a binding merger agreement to create a global energy services powerhouse, with completion targeted for the second half of 2026. The new entity, to be renamed Saipem7, will have an estimated annual revenue of approximately €21 billion, an EBITDA exceeding €2 billion, and a combined backlog of €43 billion. The merger, confirmed after due diligence, builds on the Memorandum of Understanding signed on 23 February 2025 and is positioned as a transformational deal for offshore and onshore energy engineering and construction services.

The merged group will be headquartered in Milan, Italy, and listed on both the Milan and Oslo stock exchanges. Subsea7 shareholders will receive 6.688 new Saipem shares for every Subsea7 share and an extraordinary dividend of €450 million before the completion of the transaction. Saipem and Subsea7 shareholders will own equal 50% stakes in the new entity.

What strategic advantages does the merger between Saipem and Subsea7 bring to the energy services market?

Saipem7 will combine Saipem’s extensive onshore engineering expertise with Subsea7’s offshore engineering and subsea capabilities, creating a comprehensive energy services provider capable of handling ultra-deepwater oil and gas projects, offshore wind installations, and carbon capture infrastructure. The combined operations will span more than 60 countries, with no single country contributing more than 15% of total backlog, ensuring geographical diversification.

The merged fleet of over 60 construction vessels will include heavy-lift, J-lay, S-lay, and reel-lay pipeline installation vessels, as well as wind turbine and cable-lay installation units. This diversified fleet will allow Saipem7 to address the growing complexity and scale of offshore energy projects. Management expects annual synergies of approximately €300 million from the third year after completion, driven by optimized vessel utilization, consolidated procurement, and streamlined sales and marketing.

Institutional investors consider this deal a response to the increasing project sizes demanded by oil and gas majors, carbon capture operators, and renewable energy developers. The merger enhances Saipem7’s ability to bid for large integrated contracts, with a balance sheet designed to target an investment-grade credit rating.

How does the governance and ownership structure ensure stability and balanced control in Saipem7?

The governance of Saipem7 will reflect a balanced ownership structure, with Eni S.p.A. and CDP Equity (major shareholders of Saipem) and Siem Industries (the largest Subsea7 shareholder) each committing to vote in favor of the deal under a Shareholders’ Agreement. Post-merger, Siem Industries will own approximately 11.8% of Saipem7’s capital, while Eni and CDP Equity will hold approximately 10.6% and 6.4%, respectively.

Leadership roles have already been determined: Kristian Siem is set to become Chairman of Saipem7, while Alessandro Puliti, currently CEO of Saipem, will lead the merged group as its CEO. John Evans will remain CEO of the operationally autonomous Offshore Engineering & Construction business, which will continue under the Subsea7 brand as “Subsea7, a Saipem7 Company.”

The by-laws of Saipem7 will allow loyalty shares (double voting rights), which will be accessible to all shareholders, further encouraging long-term investment.

What financial performance metrics are expected post-merger, and how are institutional investors responding?

Saipem7 is expected to generate more than €800 million in free cash flow annually, with a target to distribute at least 40% of its free cash flow after lease liability repayment to shareholders. Each company will pay separate cash dividends of $350 million during 2025, and if the transaction is delayed beyond Q2 2026, both Saipem and Subsea7 are expected to distribute at least $300 million each, subject to meeting financial targets.

Institutional sentiment is cautiously optimistic, with investors highlighting the importance of successfully realizing the projected €300 million in synergies to justify the valuation. Analysts have pointed out that the diversified backlog and expanded fleet mitigate cyclical risks in oil and gas, while increased exposure to offshore wind and carbon capture aligns with the global energy transition.

How could the merger influence competition and capital market access in the offshore engineering and renewable energy space?

With combined capabilities across oil, gas, carbon capture, and offshore wind, Saipem7 is expected to intensify competition for large-scale integrated projects currently dominated by TechnipFMC plc and McDermott International. The ability to allocate capital efficiently across a larger and complementary fleet gives the merged group a competitive edge in bidding for EPCIC (Engineering, Procurement, Construction, Installation, and Commissioning) contracts.

Capital markets are also expected to play a significant role in funding Saipem7’s future growth. The enhanced scale is anticipated to improve access to both equity and debt markets, with management targeting an investment-grade credit rating to attract a broader institutional investor base. Analysts expect Saipem7 to leverage its scale to secure long-term contracts with energy majors and government-backed renewable projects.

What are the regulatory and completion timelines, and what challenges remain for the Saipem–Subsea7 merger?

The merger remains subject to approvals from antitrust authorities, regulatory bodies, and shareholders of both companies. Saipem’s Extraordinary General Meeting will require “whitewash majorities” to secure a mandatory takeover bid exemption, while Subsea7 shareholders have been granted cash compensation rights under Luxembourg company law if they vote against the deal.

Both Extraordinary General Meetings are scheduled for 25 September 2025, with completion anticipated in the second half of 2026. Preliminary antitrust analysis has been completed, and filings with relevant authorities are in progress. However, institutional investors note that any delays in regulatory approvals or macroeconomic headwinds could push the timeline beyond 2026, affecting synergy realization.

Can Saipem7 redefine global offshore energy services amid rising project complexity?

If successfully executed, Saipem7 could emerge as a market leader capable of delivering integrated energy solutions across oil, gas, carbon capture, and offshore wind. Its scale, diversified fleet, and strong balance sheet position it well to capture the growing demand for complex, large-scale offshore energy projects. Analysts expect that Saipem7’s success will depend on how quickly it integrates its operations, secures large contracts from energy majors, and manages its dual focus on traditional oil and gas and renewable energy markets.

Institutional investors are watching closely for early signs of synergy capture and backlog growth in renewable energy segments, particularly offshore wind, where Saipem7’s vessel capabilities could help secure multi-gigawatt projects.