CGG of France Said to Weigh Sale After Technip ApproachTara Patel, Ruth David, Manuel Baigorri and Dinesh Nair
CGG SA, the French seismic surveyor of oil and natural-gas fields, is weighing a sale of the company after being approached by Technip SA, people with knowledge of the matter said.
CGG, which is worth about 1.2 billion euros ($1.5 billion), rejected an initial offer from Technip as too low and talks are continuing, said the people, who asked not to be identified because details of the proposal are private. No final decision has been made and CGG may decide against a sale, they said.
The French government, whose fund owns stakes in both CGG and Technip, according to data compiled by Bloomberg, is pushing for a combination of the companies, said one of the people. CGG could also attract interest from other buyers including Schlumberger Ltd., the people said. A representative for Schlumberger, based in Paris and Houston, declined to comment.
CGG’s U.S.-listed stock jumped 23 percent yesterday in New York. Shares of the Paris-listed operator of specially-equipped vessels have been volatile in recent months as the oil-services company grapples with global oversupply in the industry. They have declined 48 percent this year.
The company, which has renegotiated debt terms and cut its fleet and workforce this year, has been hit by falling demand from customers amid plummeting crude prices.
A spokesman for CGG declined to comment. Representatives for Technip didn’t respond to requests for comment.
Chief Executive Officer Jean-Georges Malcor said this month the market is “difficult” as oil companies rein in spending. Explorers like Total SA use CGG’s technology to make seismic studies of the earth’s geology, including under ocean floors, to locate and estimate the size of reserves.
CGG posted a net loss of $116 million in the third quarter, including costs of a restructuring plan, after a loss of $325 million in the previous quarter. The company unveiled a plan in August to cut its fleet and more than 1,000 jobs worldwide.