I said at the time this was a purely defensive merger for MDR, who just didn’t want to get swallowed by GE. So this is effectively a hostile bid by Subsea 7 who must know MDR management well enough to know that they want to be in control not an acquired entity. The publicity around this means they have effectively gone directly to the MDR shareholders having been given the cold shoulder by the MDR Board.
A Subsea 7/MDR industrial combination makes a lot more financial and strategic sense than putting MDR management in charge of a turnaround job in a sector they have no experience in (despite their obvious competence in offshore). Subsea 7 are also unlikely to have done this without engaging an investment bank to sound out some of the key US shareholders and see how receptive they are to this.
Outside of the Middle East this takeover will be paid for with synergies that will see Susbea 7 takeover everything and massive cuts in staff numbers to McDermott. McDermott have won market share lately though because their DNA is to be more cost focused than some other companies, they have a vast technical and operational heritage, Subsea 7 will need to ensure they don’t try and make the company more like them in the Middle East for this to work. But I believe they are backing themselves for a full hostile takeover here and on a purely economic basis they should prevail.