CGGVeritas buying Fugro unit for $1.55 billion

AP News
Posted: Sep 24, 2012 8:45 AM
CGGVeritas buying Fugro unit for $1.55 billion

NEW YORK (AP) — CGGVeritas, which provides equipment and services to oil and gas companies, is buying Fugro's geoscience unit for 1.2 billion euros ($1.55 billion).

The French company said Monday that the deal will expand its capabilities in serving its customers in activities ranging from exploration through production. It anticipates the acquisition will add to its results next year.

Among the businesses being acquired from The Netherlands-based Fugro are operations used in seismic exploration, developing reservoirs and seven ships used to operate in challenging offshore areas.

The transaction does not include the existing multi-client library and nodes businesses.

CGGVeritas CEO Jean-Georges Malcor said in a statement that the acquisition "fully complements our products and services and enables us to better serve our clients across the complete exploration to production value chain."

CGGVeritas said Monday that it expects to finance the deal with one-third equity and two-thirds from debt and proceeds from its Seabed joint venture share. The Seabed joint venture is with Fugro, which will own 60 percent of the joint venture once it makes a 225 million euros ($290.2 million) payment to CGGVeritas.

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CGGVeritas says it expects to finance the debt with a bridge loan. The company anticipates the deal adding to its 2013 results.

About 2,500 Fugro workers will become a part of CGGVeritas as part of the transaction. Approximately 230 CGGVeritas employees will join the Seabed joint venture.

Both companies' boards have approved the buyout, which is expected to close before the end of the year. The deal is subject to antitrust clearances and consultations with work councils.