Item 1.01
|
Entry into a Material Definitive Agreement
|
On May 18, 2016, FMC Technologies, Inc. (the
Company), and FMC Technologies SIS Limited, a private limited company incorporated under the laws of England and Wales and a wholly owned subsidiary of the Company (Topco), entered into a binding memorandum of understanding
(the MOU) with Technip S.A., a French
société anonyme
(Technip). The MOU provides that, subject to completion of certain employee consultation procedures required under applicable law and certain other
customary conditions, the parties to the MOU will enter into a definitive business combination agreement, attached as an exhibit to the MOU (the Business Combination Agreement), providing for a business combination among the Company,
Topco and Technip on the terms contained in the Business Combination Agreement.
Under the MOU, Technip has agreed to commence, within
eight business days of the execution of the MOU, the employee consultation process required under applicable law to obtain opinions of the applicable works councils. Subject to the conditions set forth in the MOU, the parties to the MOU will execute
and deliver the Business Combination Agreement within two business days following the completion of (i) the employee consultation period and (ii) the expiration of a subsequent five-day period during which the parties may consider the
opinions rendered by the works councils. The employee consultation period ends on the earlier of the date on which the final opinion is rendered or deemed rendered by the applicable works councils and September 30, 2016.
The representations and warranties contained in the Business Combination Agreement are incorporated, and were made as of the date of entry,
into the MOU. In addition, the MOU incorporates certain covenants contained in the Business Combination Agreement, including, among others, covenants relating to the conduct of the parties respective businesses between the date of entry into
the MOU and the consummation of the transactions contemplated by the Business Combination Agreement, as well as customary covenants that restrict each partys ability to solicit, or enter into negotiations with respect to, competing proposals,
in each case subject to certain exceptions.
The MOU provides for certain termination rights, including, among others, the ability of the
Company or Technip to terminate the MOU if (i) either partys board of directors changes its recommendation with respect to the proposed transaction under certain specified circumstances or (ii) the other party breaches its representations,
warranties or covenants contained in the MOU (subject to customary materiality thresholds and cure periods). Under certain circumstances in connection with the termination of the MOU, including if the MOU is terminated because the Companys
board of directors changes its recommendation with respect to the proposed transaction, the Company will be required to pay Technip a termination fee of $250 million, and under other circumstances, including if the MOU is terminated because the
Technip board of directors changes its recommendation with respect to the proposed transaction, Technip will be required to pay the Company a termination fee of $250 million. Additionally, Technip may terminate the MOU if Technip receives an opinion
of a works council in opposition to the proposed transactions, provided that Technip then reimburses or causes to be reimbursed certain expenses of the Company and Topco.
The foregoing description of the MOU and the transactions contemplated thereby does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the MOU, a copy of which is filed herewith as Exhibit 2.1 and is hereby incorporated by reference herein.
Business Combination Agreement
The
Business Combination Agreement provides for (i) the merger of Technip with and into Topco (the Technip Merger), with Topco surviving the merger, and immediately thereafter, (ii) the merger of a wholly owned indirect
subsidiary of
Topco (Merger Sub) with and into the Company (the Company Merger and, together with the Technip Merger, the Mergers), with the Company surviving as a wholly owned subsidiary of Topco, in each case subject to the
terms and conditions of the Business Combination Agreement. At the effective time of the Technip Merger, each issued and outstanding ordinary share of Technip (the Technip Shares), other than Technip Shares owned by Technip or its wholly
owned subsidiaries, will be converted into the right to receive two
ordinary shares of Topco (Topco Shares). At the effective time of the Company Merger, each share of common stock of the Company (each, a Company
Share), other than Company Shares owned by the Company, Topco, Merger Sub or their respective wholly owned subsidiaries, will be converted into the right to receive one
Topco Share. Topco will apply to list the Topco Shares to be issued
in the Mergers on the New York Stock Exchange (the NYSE) and the regulated market of Euronext Paris (Euronext). Based on the respective capitalization of Technip and the Company as of the date hereof, following consummation
of the Mergers, former Technip stockholders will own approximately 50.9 percent of Topco and former stockholders of the Company will own approximately 49.1 percent of Topco, on a fully diluted basis.
1
Closing of the Mergers is subject to certain conditions, including (i) receipt of Company and
Technip stockholder approvals, (ii) clearance from certain competition and foreign investment authorities in the areas where the companies operate, including the expiration or termination of the waiting period under the United States
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) clearance from the French Ministry for Economy, Industry and the Digital Sector, (iv) the absence of any law, injunction, order or other judgment prohibiting the Mergers, (v)
effectiveness of a registration statement for the Topco Shares to be issued in the Mergers and approval of an admissions prospectus by a competent regulator in the United Kingdom or France relating to such shares, (vi) NYSE and Euronext listing
approval for Topco Shares, (vii) the expiration of a one-month Technip creditor opposition period, (viii) subject to customary materiality exceptions, the accuracy of the other partys representations and warranties and performance by the other
party of its obligations under the Business Combination Agreement, and (ix) delivery of pre-merger compliance certificates to the High Court of England and Wales and the Registrar of Companies in Paris.
The Business Combination Agreement contains customary representations and warranties of the parties. In addition, the Business Combination
Agreement contains certain customary covenants regarding the operation of the Companys and Technips respective businesses during the period prior to the closing of the Mergers, including, among others, limitations on their respective
ability to (i) issue or grant shares of capital stock or other equity interests; (ii) acquire shares of their capital stock or other equity interests and (iii) incur new indebtedness, in each case subject to certain exceptions contained in the
Business Combination Agreement. The Business Combination Agreement also includes customary covenants that restrict each partys ability to solicit, or enter into negotiations with respect to, competing proposals, in each case subject to certain
exceptions contained in the Business Combination Agreement.
The Company or Technip may each terminate the Business Combination Agreement
under certain circumstances, including, among others, where the other party breaches its representations, warranties or covenants contained in the Business Combination Agreement (subject to customary materiality thresholds and cure periods) or where
either party has not received from their counsel a tax opinion relating to how Topco should be treated for United States tax purposes in connection with the proposed transaction. In connection with the termination of the Business Combination
Agreement under specified circumstances, the Company or Technip may be required to pay the other party a termination fee of $250 million or may be required to reimburse the other party for its out-of-pocket expenses incurred in connection with the
Business Combination Agreement. Each partys board of directors may change its recommendation with respect to the proposed transaction (subject to the other partys right to terminate the Business Combination Agreement following such
change in recommendation) in response to a superior proposal or an intervening event if its board of directors determines that the failure to do so would be inconsistant with its fiduciary duties under applicable law, in each case after satisfying
requirements to notify and negotiate with the other party prior to making such change in recommendation.
Following the closing, the Topco
board will initially be comprised of 14 directors, consisting of 7 individuals designated by the Company prior to closing, of which 6 of whom will qualify as an independent director under the applicable rules of the NYSE and 7
individuals designated by Technip prior to closing, of which 6 of whom will qualify as an independent director under the applicable rules of the NYSE. Upon closing, (i) Doug Pferdehirt will serve as the Chief Executive Officer of Topco,
(ii) Thierry Pilenko will serve as the Executive Chair of Topco, (iii) the Company will designate the chairman of each of the nominating and corporate governance committee and the compensation committee, (iv) Technip will designate the chairman of
each of the audit committee and the strategy committee, and (v) each committee of the board will have an equal number of Company and Technip directors.
The Company and Technip have agreed that the name of Topco will be changed to
TechnipFMC plc prior to closing.
The foregoing description of the Business Combination Agreement and the transactions contemplated
thereby does not purport to be complete and is subject to, and qualified in its entirety by, (i) the full text of the Form of Business Combination Agreement, a copy of which is attached as Exhibit 2.2 herewith and is hereby incorporated by reference
herein, (ii) the full text of the Form of Topco Articles of Association, a copy of which is attached as Exhibit 2.3 herewith and is hereby incorporated by reference herein and (iii) the full text of the Form of Topco Corporate Governance Guidelines,
a copy of which is attached as Exhibit 2.4 herewith and is hereby incorporated by reference herein.
The MOU included as Exhibit 2.1
hereto (including the Business Combination Agreement included as Exhibit 2.2 hereto, the Form of Topco Articles of Association included as Exhibit 2.3 hereto and the Form of Topco Corporate Governance Guidelines included as Exhibit 2.4 hereto) has
been included to provide investors with information regarding its terms. It is not intended to provide any other factual information with respect to the Company, Topco or Technip. There are representations and warranties contained in the MOU
and the Business Combination Agreement that were made by the parties to each other as of specific dates. The assertions embodied in these representations and warranties were made solely for purposes of the MOU and the Business Combination Agreement
and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating its terms. Moreover, certain representations and warranties may not be accurate or complete as of any specified date because they
are subject to a contractual standard of materiality that is different from certain standards generally applicable to stockholders or were
2
used for the purpose of allocating risk between the parties rather than establishing matters as facts. Based upon the foregoing reasons, you should not rely on the representations and warranties
as statements of factual information. In addition, information concerning the subject matter of the representations and warranties may change after the date of the MOU, which subsequent information may or may not be reflected in the Companys
public disclosures. Investors should read the MOU and the Business Combination Agreement with the other information concerning the Company that it publicly files in reports and statements with the United States Securities and Exchange Commission.