Offshore driller Transocean has announced that it has entered into an definitive merger agreement to acquire Ocean Rig in a $2.7bn cash and stock transaction, inclusive of Ocean Rig’s net debt.
Upon completion of the merger, Transocean’s and Ocean Rig’s shareholders will own approximately 79% and approximately 21%, respectively, of the combined company.
“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,” said Transocean’s President and Chief Executive Officer, Jeremy Thigpen.
Transocean owns or has partial ownership interests in, and operates a fleet of 41 mobile offshore drilling units, while Ocean Rig’s fleet is comprised of nine drillships and two semi-submersible rigs. Additionally, Ocean Rig has two drillships currently under construction at Samsung Heavy Industries with deliveries scheduled in the third quarter of 2019 and the third quarter of 2020.
“Including five rigs under construction, and considering the two additional rigs that we have recently decided to recycle, Transocean’s pro forma fleet will be comprised of 57 floaters,” Thigpen said.
“This strategic combination of Ocean Rig and Transocean creates a world-class fleet perfectly positioned for the market recovery while reducing fragmentation that currently exists in offshore drilling. By adding our high-specification floaters to Transocean’s industry-leading fleet, the combined company will have the offshore industry’s largest and most technically capable fleet of ultra-deepwater and harsh environment floaters. Upon consummation, this transaction will be of significant benefit to the stakeholders of both companies,” commented Pankaj Khanna, president and CEO of Ocean Rig.
The transaction is expected to be completed during the first quarter of 2019.