UK-based offshore driller Ensco has entered into a definitive merger agreement with Atwood Oceanics which will see Ensco acquire the Houston-headquartered offshore driller in an all-stock transaction.
Under the terms of the merger, which both boards have unanimously approved, Atwood shareholders will receive 1.6 Ensco shares for each share of Atwood common stock. The deal represents $10.72 per share, a 33% premium for Atwood shareholders who will own around 31% of the combined entity.
Ensco said it expects to realise annual synergies of around $65m from 2019 and beyond.
Carl Trowell, chief executive officer of Ensco, commented: “The combination of Ensco and Atwood will strengthen our position as the leader in offshore drilling across a wide range of water depths around the world – creating a broad platform that we can build upon in the future. This acquisition significantly enhances our high-specification floater and jackup fleets, adding technologically advanced drillships and semisubmersibles, and refreshing our premium jackup fleet to best position ourselves for the market recovery. We believe that the purchase price for these assets represents a compelling value to our shareholders, which is augmented further by expected synergies from the transaction.”
The combined company will have a fleet of 63 rigs, made up of 37 jackups and 26 semi-submersibles/drillships, and an estimated enterprise value of $6.9bn.