Norwegian oil service providers Aker Solutions and Kvaerner will merge to strengthen their base in the global energy industry, including renewable energy, both companies said on July 17.

The two entities will join forces to create a new supplier company with a stronger position as a solid execution partner, enabling sustainable, low-carbon oil and gas production, and accelerating growth in renewable energy industries. Aker Solutions and Kvaerner have agreed to merge the companies based on the principle of equal parties. The name of the new company will be Aker Solutions ASA.

“By combining the two companies and their complementary resources, we will be able to deliver a more complete offering to a global energy industry,” Leif-Arne Langøy, current chairman of Kvaerner and also proposed new chairman of Aker Solutions, said.

Aker Solutions said Kjetel Digre has been appointed as its new CEO and will lead the merged company.

Digre plans to cut the combined fixed cost level by about 1.5 billion Norwegian crowns (US$161.32 million) on annualized basis from 2019 to 2021, and will also slash combined workforce to 15,000 from 18,800.

Both firms are controlled by Norwegian billionaire Kjell Inge Roekke.

($1 = 9.2981 Norwegian crowns)