Saipem has agreed with Eni the purchase of 100% of the equity of Snamprogetti for €680m in cash; the closing of the transaction will take place by March, 31 2006. Snamprogetti is engineering and construction company, active in the international market for the design and execution of large scale onshore plants for the production and treatment of hydrocarbons and the monetization of natural gas. Saipem is a leading company in the design and execution of large scale offshore projects for the production and transportation of hydrocarbons, and has distinctive construction capabilities for the realization of onshore projects.
As a consequence of the transaction, Saipem will have a position of primacy at the high end of the market for the provision of Engineering, Procurement, Project Management and Construction services for the Oil & Gas Industry, with a strong bias towards especially challenging activities in deepwater and remote areas; with significant technological competence such as gas monetization and heavy oil exploitation. The new Group will operate globally but with a strong local presence in the most strategic regions of West Africa, Middle East, Central Asia, and South East Asia.
The business portfolio of the new Group allows a superior balance between capital intensive (offshore) and less capital intensive (onshore) activities, along with increased resilience thanks to the intrinsically complementary nature of Upstream and Downstream business cycles. The range and nature of the clients' profile of the new Group is broader and deeper, serving both the largest international oil companies that are the traditional clients of Saipem, and the national oil companies with whom Snamprogetti generally contracts. The integration of Saipem and Snamprogetti will be uniquely facilitated by the strong industrial relationships developed on many common endeavours, by a natural affinity and culture deriving from common roots within the Eni Group, and the sharing of the same information systems. The capabilities of the two companies are both highly complementary and strongly synergistic: the amplification of the technological content and engineering & project management competence will facilitate new business, while the group-wide exploitation of the ability to operate in the toughest environments will increase efficiency.