Two industry giants, Technip and FMC Technologies, have informed that the companies will combine to create a global leader in oil and gas called TechnipFMC.

The combined company would have an equity value of $13 billion based on pre-announcement share prices.

Technip and FMC Technologies have entered into a Memorandum of Understanding (MoU) and expect to execute a definitive business combination agreement to combine the companies in an all-stock merger transaction.

According to Technip’s announcement issued on Thursday, each company’s shareholders will own close to 50 percent of the combined company.

The transaction builds on the companies’ existing alliance and joint venture, Forsys Subsea, launched in March 2015.

John Gremp, chairman and CEO of FMC Technologies, said, “This is a compelling combination that will create significant additional value for clients and all shareholders, by expanding the success that FMC Technologies and Technip have achieved through our alliance and joint venture, to capitalize on new opportunities and drive accelerated growth.”

Thierry Pilenko, Technip chairman and CEO, who will serve as executive chairman of TechnipFMC, said, “Technip and FMC Technologies both have long track records of innovation and commitment to helping their clients meet the challenges of the oil and gas industry. We have complementary skills, technologies and capabilities which our customers can access on an integrated basis or separately, as they prefer. I am confident that we can quickly demonstrate the power of TechnipFMC to our clients, our people and our shareholders.”

Doug Pferdehirt, president and COO of FMC Technologies, effective September 01, 2016, who will serve as the CEO of TechnipFMC said: “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. 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.”