Acergy to buy Subsea 7 in oil and gas engineering deal

Image caption, Acergy built the world's longest undersea gas pipeline in 2006

Norway's Acergy has announced an acquisition that will create a major new oil and gas engineering firm.

The company will buy out rival Subsea 7, creating a company of 12,000 employees and worth $5.4bn (拢3.6bn).

Acergy built what was the world's longest underwater gas pipeline in 2006, connecting the UK to Norwegian North Sea gasfields.

Markets took the news well, with Acergy shares up 11% in early Monday trading, while its target Subsea 7 was up 12%.

The buyout on the Oslo stock exchange will be an all-share offer, meaning that Acergy will not need to raise any cash to complete the deal.

The companies expect the deal to result in cost savings of at least $100m per year.