CGG Veritas acquires Fugro’s Geoscience Division and creates partnership

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CGGVeritas announced that it has entered into an agreement with Fugro to acquire Fugro’s Geoscience Division, excluding the existing Multi-Client library and nodes businesses. With this transformative agreement, CGGVeritas will become a fully integrated Geoscience company establishing a leading position in the fast growing high-end integrated geology and geophysics and reservoir market. The transaction will also strengthen and extend its existing equipment and acquisition businesses, in particular with the addition of four high-end 3D vessels. The agreement also includes strategic partnerships which will benefit from the leading positions both parties have in their respective markets: The creation of a Seabed Joint-Venture, a focused global leader in the rapidly growing Seabed acquisition market, which will be 60%-owned by Fugro after payment of EUR225M to CGGVeritas. A commercial agreement for CGGVeritas to sell Fugro’s existing Multi-Client data, which remains owned by Fugro. A global strategic technical and commercial mutual preferred supplier agreement. The gross amount of the transaction is EUR1.2B, to be paid in cash and expected to be financed with 1/3 of equity and 2/3 from debt and Seabed JV share proceeds, structured to maintain our current credit ratings. As soon as possible, CGGVeritas intends to launch a capital increase with a Rights Issue. The debt will be financed by a bridge loan. The transaction is expected to be accretive from 2013 and enable steadier cash generation from the integrated Group. The transaction has been approved by both the CGGVeritas and Fugro Boards of Directors. Closing is targeted before year-end.

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