It has been announced that Saipem has entered a binding agreement with KCA Deutag (“KCAD”) to sell its entire Drilling Onshore operations in exchange for $550 million in cash plus a 10% stake in KCAD after it acquires Saipem’s Drilling Onshore operations.

With around 4,000 employees and 83 company-owned land rigs, Saipem operates its Drilling Onshore business in 13 countries outside Italy, with a focus on the Middle East and the Americas.

In 2021, Saipem’s Drilling Onshore business posted EUR 347 million in revenues and EUR 82 million in adjusted EBITDA; the adjusted EBITDA for Drilling Onshore will account for around 20% of Saipem’s consolidated adjusted EBITDA in 2022.

In addition to drilling, engineering and technology, KCA Deutag also operates onshore and offshore. It employs 8,300 people and operates 110 drilling rigs in 20 countries. KCAD reported consolidated revenues of $1,196 million and adjusted EBITDA of $237 million for the full year of 2021. At the end of 2021, the consolidated net debt was $396 million.

The transaction’s cash proceeds will help Saipem’s liquidity by reducing its net debt and supporting the company’s 2022-25 strategic plan.

The transaction is expected to close by October 31, 2022 for activities in the Middle East and by March 31, 2023 for activities in the Americas, subject to the completion of the carve out of the Drilling Onshore business from Saipem Group, the completion of Saipem’s capital increase, and customary conditions and approvals.