Offshore driller Ensco has entered into an amendment to the transaction agreement with Rowan Companies which will see the companies combine in a $12bn all-stock transaction.
The amendment has been unanimously approved by the boards of both companies, and will see Rowan shareholders receive 2.750 Ensco shares for each Rowan share. The offer is higher than an increased offer announced by Ensco earlier this month, despite the company stating it was a final offer.
Upon closing of the combination, Ensco shareholders will own around 55% of the enlarged company, while Rowan shareholders will take a 45% stake.
Carl Trowell, president and CEO of Ensco, commented: “By reaching an amended agreement, Ensco and Rowan shareholders will benefit from anticipated expense synergies that are expected to create approximately $1.1 billion of capitalized value. Furthermore, a larger, more technologically-advanced and diverse offshore driller will provide shareholders of both companies with even greater upside as the industry recovery unfolds – ideally positioning the combined company to meet increasing customer demand and capitalize on significant future revenue growth opportunities.”
Ensco and Rowan expect to realize annual synergies of around $165m from the merger, and will operate a fleet of 82 rigs across six continents serving more than 35 customers.
The deal is subject to shareholder approval, however will be supported by one of Rowan’s largest shareholders, Odey Asset Management.
