French oilfield services provider Technip has made a move to buy CGG, a seismic acquisition specialist, also based in France.
Technip says that the proposed transaction would take the form of a public tender offer in cash for CGG’s shares at a price of 8.30 euros per share. According to The Wall Street Journal, this values CGG at €1.46 billion ($1.83 billion). CGG shares jumped 22% following the announcement.
Strong logic behind
Technip also said that it would like to enter into a constructive dialogue with CGG’s Board of Directors concerning its project “that provides a strong strategic and industrial logic,” which involves the integration and development of CGG’s reservoir and data processing and seismic equipment activities within Technip.
CGG, a provider of geological and geophysical services to the international oil and gas industry, has confirmed the Technip approach, but said that the conditions to pursue (the transaction) were not met.
“This combination would create a unique value proposition in our industry, offering technology, engineering, equipment and project management from the reservoir across the entire production system,” says Technip. The company further explains that it “would reinforce and then separate the Acquisition Division of CGG. Given the intrinsic strengths of this division and its people, Technip expects this business to become a sustainable leader in a sector that has its own characteristics.”
According to the company’s press release, Technip is confident that its project can be completed under conditions that create value for its shareholders, while maintaining a strong balance sheet and its current credit rating. However, Technip adds, the company is unable to indicate at this stage whether such transaction will occur.