Aker Solutions has announced plans to take over fellow Norwegian energy service firm Kvaerner and appoint a new chief executive.
The deal will take the form of a “statutory merger” whereby Aker Solutions will “absorb” Kværner.
Kvaerner shareholders are expected to receive ownership interests in a range between 43% to 53% in the combined company.
The enlarged entity will be called Aker Solutions and will have around 15,000 employees in 50 locations and revenues of £3.3 billion in 2019.
At the start of this year, Aker Solutions had about 16,000 employees and Kvaerner had 2,800.
Aker Solutions said both companies had started making capacity and cost reductions prior to the merger in response to lower commodity prices.
It said most of the on-going staff reductions would be completed before the tie-up is implemented.
The cost-cutting drive should create annual savings of £130 million per year from 2019-21.
The transaction is subject to approval by shareholders of both companies at extraordinary general meetings expected to be held in September.
Kjetel Digre, most recently senior vice president of operations and asset development at Aker BP, will lead the combined company.
He said: “The combined company will be a dedicated execution partner for delivery of complete projects for new energy production facilities, for example oil and gas production platforms or subsea systems, or offshore wind power installations.”
Aker Solutions will also “spin off” its wind development and carbon capture businesses two create two separate Oslo-listed companies.
Aker Solutions chairman Oyvind Eriksen said: “Aker Solutions has developed technology and taken strong positions in markets for offshore wind and carbon capture, utilisation and storage.
“However, it has become increasingly clear that these businesses represent value creation opportunities in a world transitioning to green solutions at accelerated speed and have more potential as stand-alone companies than as an integrated part of an oil service business.”
More to follow.