Technip, Europe’s largest oil engineer, plans to expand the range of service it offers energy companies after a bid to buy French seismic surveyor CGG failed.

“We’ve turned a page on this subject,” Technip CEO Thierry Pilenko said Dec. 15 on a conference call, calling it a “one-off unique opportunity.”

CGG shares plunged the most in 16 years in Paris, falling as much as 38% to 4.25 euros (US$5.29) and trading at 4.66 euros ($5.79) as of 12:56 p.m. in Paris. Technip climbed as much as 9.2% to 50.49 euros ($62.79) and traded at 47.68 euros ($59.29).

“The industrial rationale was not evident and the move would have weakened the group’s financial position at a time when the market is slowing down considerably,” Natixis analysts led by Alain Parent wrote in a note, raising the rating on Technip shares to neutral from reduce.

The Paris-based company said in a statement on Sunday evening that it doesn’t intend to make an offer for CGG. The end of talks with CGG won’t deter Technip from expanding into seismic surveying of oil and natural gas reservoirs, either through internal growth, acquisitions or alliances, Pilenko said. Talks between the two companies continued after CGG’s board rejected Technip’s Nov. 10 bid of 8.30 euro ($10.32) a share in cash, saying conditions to pursue the proposal hadn’t been met.

That price “was a good one,” Pilenko said. “The negotiations were strictly between the two companies without interference from shareholders or the state.”

With a stake in each company, the French government was key in determining whether a deal could be reached. It holds 18% of CGG’s voting rights through the state-run BPI fund and IFP Energies Nouvelles. BPI owns 5.2% of Technip.

No Interference

Technip’s bid for CGG is “sensitive” for the French economy, and the government is watching the potential deal closely, Economy Minister Emmanuel Macron said in an interview on Nov. 27.

“It’s a sector that is important for the French economy and its sovereignty,” he said.

Alternative scenarios being considered would have given Technip access to the business of studying images of oil and gas reserves, while allowing CGG to “keep its identity,” Pilenko said. Technip didn’t want to own CGG’s acquisitions unit and would have separated it out within about a year of the deal completion, CFO Julian Waldron said.

The two companies don’t have overlapping businesses. CGG uses seismic equipment to uncover and determine the size of oil and gas reservoirs, helping explorers to improve their chances of making discoveries. Technip makes pipes and builds infrastructure including platforms and refineries.

“CGG remains confident in the ongoing execution and the success of its strategy as an independent company,” it said in a statement.

Crude Decline

Complicating the discussions surrounding the approach—valued at about 1.47 billion euros ($1.8 billion)—and adding to share price volatility was the steep drop in crude oil prices, which Pilenko said could delay some projects.

Technip confirmed the potential offer after the announcement of a $34 billion deal in the U.S. to combine the world’s second-and third-largest oil-services providers, Halliburton Co. and Baker Hughes Inc., and before OPEC’s decided Nov. 27 to maintain its production volumes.

While Technip said the deal had “strong strategic and industrial logic,” CGG rejected it saying it undervalued the company’s long-term prospects.

In the event of a deal, concerns hovered over the future of CGG’s seismic data-acquisition division, which uses vessels to carry out surveys. Under the original plan, Technip said it planned to reinforce and “separate” the business. CGG has cut it back to a fleet of 13 vessels from 18, a move that eliminated 10% of its workforce, or 1,000 jobs worldwide.

CGG’s market-leading GGR and Sercel seismic studies and equipment divisions would have “considerably enhanced” the range of services Technip offered to clients, Pilenko said. Customers were “positive” about the prospect.

“Broadening our expertise into the reservoir is something our clients would like us to do,” Pilenko said. “We are entering at an earlier stage in field development and it is important not only to understand what is happening with the production system but also what’s happening with wells, reservoirs and how reservoirs will behave over time.”