Oil services firm Aker Solutions to merge with Kvaerner, names new CEO
OSLO, July 17 (Reuters) - Norwegian oil service providers Aker Solutions AKES.OL and Kvaerner KVAER.OL, both controlled by Norwegian billionaire Kjell Inge Roekke, will merge to strengthen their base in the global energy industry, both companies said on Friday.
Aker Solutions, which provides engineering services, and Kvaerner, which builds oil platforms, were hit when energy firms slashed spending as crude demand plunged due to the coronavirus crisis.
Shares in Oslo-listed Aker Solutions opened 5.2% higher and Kvaerner's stock was 7% up.
The merger aims to reduce combined fixed costs by about 1.5 billion Norwegian crowns ($161 million) on an annualised basis in 2021 compared to the level in 2019, and reduce the workforce to 15,000 by 2021 from 18,800 at the start of 2020.
"The merger will create an organisation with the required size and financial strength to compete and succeed in the growing market for renewable and sustainable energy, and generate value for shareholders," Aker Solutions said.
Shareholders in Kvaerner would own between 43% and 53% of the combined company, it added.
Kjetel Digre, Aker BP's AKERBP.OL senior vice president for operations and asset development, has been appointed as the new chief executive of Aker Solutions and will lead the merged company from Aug. 1.
Aker Solutions and Kvaerner, controlled by Roekke's Aker AKER.OL, had combined revenues of about 38 billion Norwegian crowns and EBITDA of 2.7 billion crowns in 2019.
Aker Solutions said it would spin off its renewable and carbon capture technology business into separated firms to be listed on the Merkur Market of the Oslo stock exchange.
It said the separate firms would have better opportunities to attract low cost capital from investors focused on sustainability.
($1 = 9.2981 Norwegian crowns)
(Reporting by Nerijus Adomaitis, Editing by Sherry Jacob-Phillips and Edmund Blair)
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