Saipem SpA SAPMF has taken two significant steps in strengthening its long-term growth strategy. The company has secured regulatory approval in Brazil for its proposed merger with Subsea 7 S.A. SUBCY while simultaneously announcing the sale of its shallow-water drilling business in Saudi Arabia for $285 million. Together, these developments reinforce Saipem's commitment to building a stronger, more focused business positioned to capitalize on high-value offshore opportunities.
Brazil Clears Subsea7-Saipem Merger
Brazil's antitrust authority, CADE, has approved the proposed merger between Saipem and Subsea7, each carrying a Zacks Rank #3 (Hold) at present, without imposing any restrictions. The approval marks an important milestone for the combination of two leading offshore engineering and installation companies.
The proposed merger aims to create a stronger organization capable of delivering comprehensive engineering, procurement, construction and installation services to customers worldwide. While the decision may still be appealed by interested parties, the regulatory clearance represents meaningful progress toward completing the transaction.
The merger has attracted attention across the energy industry, with several major oil companies expressing concerns about potential market concentration. These companies argued that the combined business could gain significant bargaining power in offshore project execution. Despite these objections, Brazil's competition regulator concluded its review without requiring any conditions.
Creating a Stronger Offshore Business
The combined company, expected to operate under the name "Saipem7," is designed to enhance operational capabilities and expand service offerings across global offshore markets.
By bringing together complementary expertise, technologies and project execution capabilities, the merger is expected to improve efficiency while strengthening the company's ability to compete for increasingly complex offshore developments. As energy investment continues to grow across multiple regions, the combined organization will be better positioned to support customers with integrated engineering solutions.
Saipem Sells Saudi Shallow-Water Drilling Business
Alongside the merger progress, Saipem has signed a binding agreement to sell its entire stake in Saudi Arabian Saipem Limited (“SAS”) to ADES Saudi Limited Company, a subsidiary of ADES Holding Company, for $285 million.
The transaction forms part of Saipem's broader strategy to optimize its offshore drilling portfolio by concentrating on deepwater and harsh-environment operations, where the company sees stronger long-term growth opportunities and greater value creation.
SAS currently operates a fleet of five jack-up rigs, including three owned rigs — Perro Negro 7, Perro Negro 8 and Perro Negro 10 — and two leased rigs, Perro Negro 11 and Perro Negro 13.
Maintaining Operational Continuity
As part of the agreement, Saipem and ADES will establish a bareboat charter arrangement that allows Saipem to continue its ongoing operations in Mexico using the Perro Negro 10 drilling rig.
This arrangement ensures business continuity while enabling the company to complete the asset sale without disrupting existing customer commitments. The transaction is expected to close during the third quarter of 2026, subject to customary regulatory approvals and closing conditions.
Strategic Outlook
The regulatory approval for the Subsea7 merger and the sale of the Saudi shallow-water drilling business represent complementary milestones in Saipem's strategic transformation. While the merger expands the company's engineering and offshore installation capabilities, the asset divestment sharpens its focus on higher-value drilling segments.
By strengthening its competitive position and streamlining its portfolio, Saipem is positioning itself for sustainable long-term growth while continuing to deliver advanced offshore solutions for the evolving global energy industry.
Key Picks
Investors interested in the energy sector may consider some top-ranked stocks like Global Partners LP GLP and Crescent Energy Company CRGY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Global Partners is a Delaware limited partnership formed by affiliates of the Slifka family. It owns, controls or has access to one of the largest terminal networks of refined petroleum products in New England. The Zacks Consensus Estimate for GLP’s 2026 earnings indicates 113.1% year-over-year growth.
Crescent Energy is a U.S. onshore oil and gas producer focused on three major basins: the Eagle Ford in Texas, the Permian in Texas and New Mexico and the Uinta in Utah. The Zacks Consensus Estimate for CRGY’s 2026 earnings indicates 39.4% year-over-year growth.
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This article originally published on Zacks Investment Research (zacks.com).