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CGGVeritas has entered an agreement with Fugro to acquire Fugro’s Geoscience Division, excluding the existing multi-client library and nodes businesses, according to a news release.
The transaction will enable CGGVeritas to become a fully integrated geoscience company, and it also will strengthen and extend its existing equipment and acquisition businesses, in particular with the addition of four high-end 3D vessels, the news release said.
The agreement includes strategic partnerships, including the creation of a seabed joint-venture, which will be 60% owned by Fugro after payment of €225 million (US $290 million) to CGGVeritas; a commercial agreement for CGGVeritas to sell Fugro’s existing multi-client data, which remains owned by Fugro; and a global strategic technical and commercial mutual preferred supplier agreement.
The gross amount of the transaction is €1.2 billion ($1.5 million), to be paid in cash and expected to be financed with one-third of equity and two-thirds from debt and Seabed JV share proceeds, structured to maintain our current credit ratings. As soon as possible, CGGVeritas intends to launch a capital increase with a rights issue. The debt will be financed by a bridge loan. The transaction is expected to be accretive from 2013 and enable steadier cash generation from the integrated group. The transaction has been approved by both the CGGVeritas and Fugro boards of directors.
Completion of the transaction is subject to mandatory anti-trust clearances, work councils consultation processes and other customary conditions. Closing is targeted before year-end.