France’s Technip announced an all-stock merger with U.S. rival FMC Technologies 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 Thursday.

“We have complementary skills, technologies and capabilities,” Technip Chairman and Chief Executive Thierry Pilenko said. “Together, TechnipFMC can add more value across Subsea, Surface and Onshore/Offshore, enabling us to accelerate our growth.”

Lower energy prices are driving consolidation in the oil services sector as companies seek savings to boost profits amid an oil supply glut that has been weighing on exploration and production.

Reuters reported in December that Technip had held talks with FMC.

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 percent of the combined company.

Pilenko will serve as executive chairman of TechnipFMC, while FMC Technologies’ President and Chief Operating Officer 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.