Oilfield services provider TechnipFMC has been forced to put off its planned separation into two independent entities amid challenging market conditions which have emerged recently, including the coronavirus outbreak, the sharp decline in oil prices, and the volatility in global equity markets.
TechnipFMC announced its plan to separate into two independent, publicly-traded companies – TechnipFMC and Technip Energies – in late August 2019. The company envisioned separation into a fully-integrated technology and services provider and an engineering and construction (E&C) player.
The separation was expected to be completed in the first half of 2020. In January 2020 the company confirmed it was on track to complete the separation in the second quarter of 2020.
However, TechnipFMC said in an update on Monday that market conditions had changed materially due to the COVID-19 pandemic, the sharp decline in commodity prices, and the heightened volatility in global equity markets.
The impacts of these events have created a market environment that is not currently conducive to the company’s planned separation into TechnipFMC and Technip Energies, TechnipFMC said.
The company reiterated that the strategic rationale for the separation remained unchanged.
TechnipFMC concluded it was “committed to the transaction and continues its preparations to ensure that the two companies are ready for separation when the markets sufficiently recover.”
Offshore Energy Today Staff
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