Italy's Saipem has agreed to merge with Norwegian rival Subsea 7 in an all-share deal to create a leading global player in offshore energy services. The combined group, to be renamed Saipem7, will have an order backlog of 43 billion euros ($45 billion),

Italian energy-services provider Saipem will merge with Norwegian rival Subsea7 creating a company focused on drilling, engineering and construction.

Energy services and drilling specialists Saipem SpA and Subsea7 SA agreed to combine their businesses as consolidation in the sector picks up after years of sluggish activity.

Saipem and Subsea7 have announced that they have reached an agreement in principle on the key terms of a possible merger of the two companies through the execution of a Memorandum of Understanding (MoU).