The Paris and Houston headquartered groups have entered into a memorandum of understanding (MOU) over the proposed tie-up and they hope to complete the merger next year.
The combined group will have 49,000 employees in more than 45 countries including in the UK where both companies have a presence in the North Sea.
FMC Technologies also has significant operations in Fife with a manufacturing base at Pitreavie Business Park in Dunfermline.
Together, the two companies generated revenues of approximately $20 billion in 2015 and had combined earnings before interest, tax, depreciation and amortisation of $2.4bn.
The firms said they expected the tie-up to deliver $200 million of cost synergies in 2018 and a further $400m of annualised savings thereafter.
The savings will be in addition to the cost efficiencies that both companies are currently pursuing following the sustained downturn in the global oil price.
Announcing the planned merger, the two firms said a tie-up would bring together “two complementary market leaders and their talented employees” and create a leader in the subsea, surface and onshore/offshore services market.
Under the terms of the MOU, the two companies shareholders will own close to 50% of the combined company.
The senior management team of TechnipFMC will include executives from both companies with Technip chairman and CEO Thierry Pilenko to become executive chairman and Doug Pferdehirt, currently FMC Technologies’ president and chief operating officer, to be the new group’s chief executive.
“This transaction will allow us to deliver even greater benefits to our customers through a broadened portfolio that provides a unique set of integrated technologies and competencies that are underpinned by a history of developing rich partnerships and creating customer success,” Mr Pferdehirt said.
“We look forward to rapidly bringing together the outstanding employees and cultures of both companies, as well as the complementary capabilities of our organizations, to position the combined company at the forefront of a new generation of solutions for the oil and gas industry.”
Mr Pilenko said an alliance of the two companies brought new and exciting opportunities.
“Technip and FMC Technologies both have long track records of innovation and commitment to helping their clients meet the challenges of the oil and gas industry,” he said.
“A year ago, we were at the forefront of recognizing the importance of a broader view of our clients’ challenges and seized the opportunity that working together in our alliance could bring.
“Today we want to take this strategy further and across the full footprint of the two companies. We have complementary skills, technologies and capabilities which our customers can access on an integrated basis or separately as they prefer.
“Together, TechnipFMC can add more value across Subsea, Surface and Onshore/Offshore, enabling us to accelerate our growth. I am confident that we can quickly demonstrate the power of TechnipFMC to our clients, our people and our shareholders.”
