Aker Solutions appoints new CEO and merger with Kvaerner
Aker Solutions is launching a series of structural and strategic changes to transform the company and enhance shareholder value by spinning off the wind and carbon capture businesses to shareholders and merging Aker Solutions ASA with Kværner ASA to create an optimized 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 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.
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.
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.
Kvaerner and Aker Solutions have for many years been successful suppliers to customers operating energy production facilities, especially to oil companies with oil and gas fields. Customers in this market are increasingly asking for solutions with reduced environmental footprint, and new customers ask for renewable energy solutions.
The merger will create an organization 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 ASA will absorb Kværner ASA, in accordance with the Norwegian Public Limited Liability Companies Act.
The combined company will leverage industrial software and digital technology to optimize output and improve efficiencies in customer projects and operations. The combined company will be a dedicated supplier that adds value by offering early front-end customer engagement, concept and system solutions for renewables and decarbonization projects in offshore wind, carbon capture, utilization and storage, electrification and emerging energy segments such as hydrogen. The combined company will utilize its global footprint in brownfield services and subsea to enter international renewables markets.
Furthermore, the combined company will do fabrication at own facilities or in cooperation with partners around the world. The combination of the two companies’ solutions and technologies provides a stronger offering of renewable energy solutions.
Aker Solutions had at the start of 2020 approximately 16,000 employees, and Kvaerner had about 2,800. As an adaption to changing markets, both companies have prior to the merger commenced necessary reductions of capacities and cost. Most of the ongoing staff reductions will be completed before the merger is implemented. The combined cost-cutting initiatives aim to reduce the fixed cost-level by about NOK 1.5 billion on an annualized basis, from 2019 to 2021.
About the Combined Company
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.
