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The two firms announced the binding deal in a statement on Thursday.
This follows an agreement in principle reached in February this year.
Saipem and Subsea7 shareholders will own 50 percent each of the share capital of the combined company Saipem7.
Subsea7 shareholders will receive 6.688 Saipem shares for each Subsea7 share held.
The company resulting from the merger will have revenue of approx. 21 billion euros ($24.7 billion), Ebitda in excess of 2 billion euros.
Also, Saipem7 will generate more than 800 million euros of free cash flow and will have a combined backlog of 43 billion euros.
The merged firm will have a global workforce of approximately 44,000 people, including more than 9,000 engineers and project managers.
Saipem7 will remain incorporated in Italy and headquartered in Milan, and will have its shares listed on both the Milan and Oslo stock exchanges.
Siem Industries, reference shareholder of Subsea7, and Eni and CDP Equity, reference shareholders of Saipem, have committed to vote in favour of the proposed combination, the two frim said.
Completion of the proposed combination is expected to occur in the second half of 2026.
Saipem is currently working on several LNG projects, including the giant Qatari LNG expansion.
Last year, Saipem and its Indonesian consortium partner Meindo Elang Indah secured a $1.2 billion offshore contract for the BP-led Tangguh UCC project in Papua Barat, Indonesia.
