Saipem and Subsea 7 Brazil Approval Removes Key Overhang; ~5x Implied Multiple Leaves Re-Rating Upside

Research evidence excerpt

Saipem and Subsea 7 Brazil Approval Removes Key Overhang; ~5x Implied Multiple Leaves Re-Rating Upside

rough to customers under the legal test. As a result, the

approval rests less on synergy pass-through and more on CADE’s conclusion that

the transaction does not reduce global vessel availability or create incremental

incentives to exercise market power.

• Implied ~5x multiple on combined company leaves room for significant re-rating.

Despite strong YTD performance, the market is assigning the combined company a ~5x

multiple on our 2027 estimates. We note that these estimates are conservative, as they do

not include revenue synergies and assume only one-third of the guided €300mm annual

cost synergies to be realized three years after close. A re-rating to ~6x, firmly within

Saipem’s long-term historical range (Figure 1), would imply ~40% upside from

current levels for Saipem. We see further upside potential from revenue synergies,

which would drive higher earnings, and from a size premium in a still-growing subsea

sector that we expect to be assigned by the market given the scale of the combined

franchise.

Figure 1: Saipem Forward EV / Consensus EBITDA Figure 2: Subsea 7 Forward EV / Consensus EBITDA

10.00x 8.00x

9.00x

7.00x

8.00x

7.00x 6.00x

6.00x 5.00x

5.00x

4.00x

3.00x 3.00x

2.00x 2.00x

1.00x

0.00x Jan-14 Jun-14 Nov-14 Apr-15 Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar-18 Aug-18 Jan-19 Jun-19 Nov-19 Apr-20 Sep-20 Feb-21 Jul-21 Dec-21 May-22 Oct-22 Mar-23 Aug-23 Jan-24 Jun-24 Nov-24 Apr-25 Sep-25 Feb-26

Jan-14 Jun-14 Nov-14 Apr-15 Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar-18 Aug-18 Jan-19 Jun-19 Nov-19 Apr-20 Sep-20 Feb-21 Jul-21 Dec-21 May-22 Oct-22 Mar-23 Aug-23 Jan-24 Jun-24 Nov-24 Apr-25 Sep-25 Feb-26 SUBC Fwd EV/Consensus EBITDA Ten -year median -1 std.