Technip makes Coflexip bid

July 3, 2001 Posted: 1417 GMT

LONDON (CNN) -- Technip, a French energy services company, on Tuesday launched an unsolicited bid for rival Coflexip in a deal worth 3.3 billion euros.

The cash-and-share acquisition of Coflexip will create Europe's biggest oil services company.

Technip, (PTEC) designs and builds facilities for industrial, petrochemical and fertilizer manufacturers, will exchange nine shares for eight Coflexip shares. It will buy another 26.7 percent of Coflexip for 193 per share in cash.

The Paris-based company will also make a separate offer to buy the 17 percent of Coflexip shares held by Isis, a state holding company, in a 12-for-11 share exchange, valuing the offer at 768 million.

The combination of the two companies, called Technip-Coflexip, will increase the groups geographic range from the Gulf of Mexico to the North Sea and from the Caspian to South East Asia.

Technip, which bought 30 percent of Coflexip last year, will benefit from Coflexip's expertise in building and laying the flexible pipes that take oil from the sea bed to oil rigs and platforms. 

"There would be significant advantages in having a complete engineering capability in a sector that is experiencing strong growth," CDC Bourse analyst Catherine Leveau told Reuters.

"An expansion in the new group's areas of expertise should allow it to have a presence on more projects and play a more significant role in those projects," Technip said.

In 2000, Technip-Coflexip had combined sales of 4.5 billion, Technip said. 

The merger is expected generate pre-tax cost savings of 85 million euros by 2003 and raise the combined company's earnings per share by one percent from 2002, before goodwill and amortisation.

The company predicts annual earnings before interest, taxes, depreciation and amortisation, or EBITDA, will rise 120 million from 2005, Technip said.

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