France's Technip announced an all-stock merger with U.S. rival FMC Technologies Corp. (NYSE: FMC) to create an oil services group with combined revenue of $20 billion.

The transaction is expected to deliver annual pretax savings of at least $400 million as of 2019 and boost earnings per share significantly, the companies said in a statement on May 19.

Under the terms of the deal, each Technip share will be converted into two shares of TechnipFMC, and each FMC Technologies share will be exchanged for one share of TechnipFMC, with each company's shareholders owning close to 50% of the combined company.

Pilenko will serve as executive chairman of TechnipFMC, while FMC Technologies' President and COO Doug Pferdehirt will be CEO, the companies said. The transaction is expected to close early in 2017.

Last year, the two companies formed a joint venture, Forsys Subsea, aimed at reducing the cost of subsea oilfield exploration, a sector that has been badly hurt by the drop in the price of oil.

Technip has a market value of about $6.2 billion, compared with $6.5 billion for FMC Technologies. Technip has annual revenue of $13.5 billion, more than double that of FMC Technologies.

Goldman Sachs and Rothschild are acting as financial advisers to Technip. Evercore and Societe Generale are acting as financial advisers to FMC Technologies.