Aker Solutions to spin off businesses in preparation to merge with Kvaerner

Aker Solutions announced that it is launching a series of structural and strategic changes to transform the company by spinning off the wind and carbon capture businesses to shareholders and merging Aker Solutions with Kværner to create an optimised supplier company.

Kjetel Digre has been appointed chief executive officer of Aker Solutions, effective August 1, 2020, and will lead the combined company.

Aker Solutions intends to spin off its wind development business as well as the carbon capture technology business to Aker Solutions’ shareholders in two separate companies expected to be admitted to trading on Merkur Market on the Oslo Stock Exchange.

"Aker Solutions has developed technology and taken strong positions in markets for offshore wind and carbon capture, utilisation and storage," says Øyvind Eriksen, chairman of Aker Solutions. "However, it has become increasingly clear that these businesses represent value creation opportunities in a world transitioning to green solutions at accelerated speed and have more potential as stand-alone companies than as an integrated part of an oil service business."

"Renewables and green technologies have entirely different value chains, customers, investor bases and sources of funding. Capitalising and separating the offshore wind and CCUS business areas from Aker Solutions present a unique opportunity for growth and value creation," adds Eriksen.

Aker Solutions will be an alliance partner and preferred supplier to both companies to create revenue and customer value within wind and CCUS markets.

Kjetel Digre will on August 1 join Aker Solutions as CEO. Digre joins from Aker BP, where he held the role of senior vice president of Operations and Asset Development.

"Kjetel has done a remarkable job as project director for the Johan Sverdrup development, where his ability to bring together people and organizations to foster strong collaboration yielded great results. I'm confident that Kjetel will do a great job leading the new company," says Eriksen. "I would also like to thank Luis Araujo for his leadership as CEO of Aker Solutions for the past six years."

Idar Eikrem, currently chief financial officer of Kvaerner, has been appointed CFO of Aker Solutions, effective August 1. Eikrem will step down as CFO of Kvaerner on the same date.

Merger with Kvaerner

Kvaerner and Aker Solutions have entered into a merger plan, whereby the two entities will join forces to create a new supplier company with a stronger position as a solid execution partner, enabling sustainable, low-carbon oil and gas production, and accelerating growth in renewable energy industries. Aker Solutions and Kvaerner have agreed to merge the companies based on the principle of equal parties. The name of the new company will be Aker Solutions ASA.

"By combining the two companies and their complementary resources, we will be able to deliver a more complete offering to a global energy industry," says Leif-Arne Langøy, current chairman of Kvaerner and also proposed new chairman of Aker Solutions.

The merger will create an organisation with the required size and financial strength to compete and succeed in the growing market for renewable and sustainable energy, and generate value for shareholders, customers and society. The consolidation will take the form of a statutory merger whereby Aker Solutions will absorb Kværner.

The combined company will have about 15,000 employees in more than 50 locations around the world, including about 8,000 employees in Norway. Combined 2019 revenues for the companies were about NOK 38 billion, with an EBITDA of NOK 2.7 billion.

The combined company will have operations in about 25 countries. This includes offices for concept development, engineering and project execution, as well as effective fabrication yards and facilities for manufacturing of advanced equipment.

In the planned merger process, a new organisation model will be established. Kjetel Digre will take the role as CEO and Ivar Eikrem will take the role of CFO of Aker Solutions. Other key management positions will be concluded during the coming weeks.

Completion of the merger is subject to approval by the shareholders of each of Aker Solutions and Kvaerner through extraordinary general meetings, expected to be held in September 2020.