The Trieste-based buyer, which gained notoriety in January when its Costa Concordia luxury liner hit a reef off the western Italian coast and partially sank, will make the acquisition in two steps.
First, it will pay S$1.22 a share, or a total of €455 million, to buy a 50.75% stake from the target's majority shareholder, STX Europe AS. STX Europe, previously known as Aker Yards, was acquired by South Korea's STX Group between 2007 and 2009.
Alesund, Norway-based STX OSV was spun off and listed on the Singapore Exchange in November 2010. Och-Ziff Capital Management Group LLC owns just over 12% of STX OSV.
Fincantieri said the offer price represents a 12.9% discount to the target's closing price on Thursday, Dec. 20, and is 17.5% below the weighted average price over the past three months.
The first deal is slated to close by April, after which Fincantieri has to launch an offer for the remaining shares to comply with Singapore takeover rules.
On Friday in Singapore, shares in STX OSV dropped 7.1% to 1.30 Singapore dollars, giving it a market value of S$1.53 billion ($1.26 billion) and suggesting investors may not tender their stock.
The acquisition will allow Fincantieri to nearly double in size with 21 shipyards on three continents, nearly 20,000 employees and total revenue of €4 billion -- making it one of the top five global shipbuilders and the only European company among a roster of South Korean market leaders.
Fincantieri, already one of the world's largest designers and builders of merchant and naval vessels, wants STX OSV in order to expand into the fast-growing and profitable offshore energy market, as rising energy demand sparks more drilling activity.
"Today marks the beginning of a new era for Fincantieri," CEO Giuseppe Bono said. "I'm sure this is the right way forward to optimize our global leadership and to establish ourselves as champions of the Western world."
Credit Suisse Group and Nomura Holdings Inc. are advising Fincantieri on the deal. STX OSV did not use any financial advisers and used local legal counsel in each of the jurisdictions in which it operates, according to spokesman Holger Dilling.
The buyer plans to finance the deal mainly from internal resources, and with a syndicated loan from lenders including Banca IMI SpA, BNP Paribas SA, Banca Carige SpA, UniCredit SpA and Cassa Depositi e Prestiti.
Steven C. Todrys joined Evercore's investment banking business as a senior adviser, focusing on transactional tax and structuring solutions. For other updates launch today's Movers & shakers slideshow.
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