French oilfield services giant Technip and U.S. subsea equipment specialist FMC Technologies, have announced a merger agreement.

The companies said that the merger will create “a global leader that will drive change by redefining the production and transformation of oil and gas.”

The combined company will be called TechnipFMC and will have an equity value of $13 billion.

According to the announcement on Thursday, the companies have signed a memorandum of understanding to merge in an all-stock transaction where Technip shareholders will receive two shares of the new company for each share of Technip, and FMC Technologies shareholders will receive one share of new company for each share of FMC Technologies.

Each company’s shareholders will own close to 50 percent of the combined company, Technip said in the announcement.

The transaction is expected to close early in 2017, subject to the approval of both Technip and FMC Technologies shareholders, regulatory approvals and consents, as well as other customary closing conditions.

“Transaction brings together two market leaders and their talented employees, building on the proven success of their existing alliance and joint venture, Forsys Subsea, uniting innovative technologies, common cultures and values, enabling rapid integration. The combined company will offer a new generation of comprehensive solutions in Subsea, Surface and Onshore/Offshore to reduce the cost o f producing and transforming hydrocarbons,” the companies said.

With more than 49,000 employees operating in over 45 countries, TechnipFMC generated 2015 combined revenue of approximately $20 billion and combined 2015 EBITDA of approximately $2.4 billion. As of March 31, 2016, the two companies together had consolidated backlog of approximately $20 billion.

Technip Chairman and CEO, Thierry Pilenko, will serve as Executive Chairman of TechnipFMC’s Board of Directors. Doug Pferdehirt, currently FMC Technologies’ President and COO, will serve as CEO of TechnipFMC. FMC Technologies announced on May 9, 2016 that Doug Pferdehirt will be appointed as CEO of FMC Technologies effective September 1, 2016.

The Board of Directors will consist of seven members designated by FMC Technologies, including Doug Pferdehirt, and seven members designated by Technip, including Thierry Pilenko.

The group will organize its activities into five business units covering Surface, Subsea Services, Products, Subsea Projects, and Onshore/Offshore, with the first two headquartered in Houston and the others in Paris.

Pferdehirt to serve as CEO

Thierry Pilenko, Technip Chairman and Chief Executive Officer, said: “A year ago, we were at the forefront of recognizing the importance of a broader view of our clients’ challenges and seized the opportunity that working together in our alliance could bring. Today we want to take this strategy further and across the full footprint of the two companies. We have complementary skills, technologies and capabilities which our customers can access on an integrated basis or separately as they prefer. Together, TechnipFMC can add more value across Subsea, Surface and Onshore/Offshore, enabling us to accelerate our growth. I am confident that we can quickly demonstrate the power of TechnipFMC to our clients, our people and our shareholders.”

Doug Pferdehirt, President and Chief Operating Officer of FMC Technologies added, “Our alliance has shown that as customers evaluate solutions, they are involving us in the process earlier and to a greater degree than ever before. The more they seek our recommendations and new products, the more we differentiate ourselves from the competition. This transaction will allow us to deliver even greater benefits to our customers through a broadened portfolio that provides a unique set of integrated technologies and competencies that are underpinned by a history of developing rich partnerships and creating customer success. We look forward to rapidly bringing together the outstanding employees and cultures of both companies, as well as the complementary capabilities of our organizations, to position the combined company at the forefront of a new generation of solutions for the oil and gas industry.”