The largest offshore oil drilling contractor, Transocean, has reached a deal to acquire Ocean Rig for $2.7bn.
The Swiss-based company will enter a cash and stock transaction for the offshore drilling contractor.
“The proposed acquisition of Ocean Rig provides us with a unique opportunity to continue enhancing our fleet of ultra-deepwater and harsh environment floaters, without compromising our liquidity or overall balance sheet flexibility,” commented President and CEO of Transocean, Jeremy Thigpen.
“The combination of constructive and stable oil prices over the last several quarters, streamlined offshore project costs, and undeniable reserve replacement challenges has driven a material increase in offshore contracting activity.”
“As such, adding Ocean Rig’s premium assets to our industry-leading fleet provides us with an increased number of the modern and highly efficient ultra-deepwater drillships preferred by our customers, and better positions us to capitalize on what, we believe, is an imminent recovery in the ultra-deepwater market.”
The deal will include Transocean providing Ocean Rig’s shareholders 1,6128 newly issued shares and $12.75 per share for the Cyprus-based firm’s common stock.
This would value Ocean Rig’s shares at $32.28 per share, a 20.4% premium over the average share price from 31 August.
“This combination with Ocean Rig further strengthens our relationships with strategic customers, while expanding our presence in the key markets of Brazil, West Africa and Norway,” continued Thigpen.
“It also enables us to reduce our cost per active rig, as we believe that we can efficiently merge the Ocean Rigoperations into our existing structure with limited incremental shore-based expense.”
“Further, we are confident that we can realize meaningful synergies through our OEM agreements, our overall approach to maintenance and our fleet-wide insurance coverage, among other opportunities.”