Kværner and Aker Solutions to merge and do more for decarbonisation

Norwegian offshore engineering and construction firms Aker Solutions ASA and Kværner ASA today announced plans to merge and pursue more projects in the growing market for renewable and sustainable energy.

The plan is for Aker to absorb Kværner. The latter’s shareholders will get between 43% to 53% in the combined company, which will be present in 25 countries and listed on the Oslo Stock Exchange.

Kværner and Aker Solutions have so far served mainly oil and gas companies. They say there is a growing demand for solutions with reduced environmental footprint among existing customers, while new ones are asking for renewable energy solutions.

"The combined entity 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," said Aker’s onboarding CEO Kjetel Digre, who will become CEO of the consolidated company.

The new company will offer early front-end customer engagement, concept and system solutions for renewables and decarbonisation projects in offshore wind, carbon capture, utilisation and storage (CCUS), electrification and new energy segments such as hydrogen. It will have offices for concept development, engineering and project execution, and effective fabrication yards and facilities for manufacturing of advanced equipment.

The combined revenues of the companies in 2019 amounted to NOK 38 billion, and earnings before interest, tax, depreciation and amortisation (EBITDA) stood at NOK 2.7 billion, including special items.

The merger comes with a reduction in staff so that the combined entity can have 15,000 employees. At the start of the year, Aker had roughly 16,000 and Kvaerner’s headcount was around 2,800. They will carry out cost-cutting measures to reduce the fixed cost-level by NOK 1.5 billion (USD 161.2m/EUR 141.3m) on an annualised basis between 2019 and 2021.

The merger needs to be okayed by the shareholders of each of Aker Solutions and Kvaerner at extraordinary general meetings, planned for September 2020.

(NOK 10 = USD 1.07/EUR 0.94)

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