Transocean Ltd. and Ocean Rig UDW Inc. have entered right into a definitive merger settlement underneath which Transocean will purchase Ocean Rig in a money and inventory transaction valued at roughly $2.7 billion, inclusive of Ocean Rig’s internet debt.
The transaction consideration is comprised of 1.6128 newly issued shares of Transocean plus $12.75 in money for every share of Ocean Rig’s frequent inventory, for a complete implied worth of $32.28 per Ocean Rig share, primarily based on the closing value on August 31, 2018. This represents a 20.four% premium to Ocean Rig’s ten-day quantity weighted common share value. The transaction has been unanimously authorised by the board of administrators of every firm.
Transocean intends to fund the money portion of the transaction consideration via a mixture of money readily available and totally dedicated financing supplied by Citi. The merger will not be topic to any financing situation.
Upon completion of the merger, Transocean’s and Ocean Rig’s shareholders will personal roughly 79% and roughly 21%, respectively, of the mixed firm.
Ocean Rig’s fleet is comprised of 9 high-specification ultra-deepwater drillships and two harsh surroundings semisubmersibles. Additionally, its fleet contains two high-specification ultra-deepwater drillships at the moment underneath building at Samsung Heavy Industries with favorable shipyard financing phrases. These two newbuilds are anticipated to be delivered within the third quarter of 2019 and the third quarter of 2020, respectively.
“The proposed acquisition of Ocean Rig supplies us with a novel alternative to proceed enhancing our fleet of ultra-deepwater and harsh surroundings floaters, with out compromising our liquidity or total steadiness sheet flexibility,” mentioned Transocean’s President and Chief Executive Officer, Jeremy Thigpen. “The mixture of constructive and steady oil costs over the past a number of quarters, streamlined offshore venture prices, and plain reserve alternative challenges has pushed a cloth improve in offshore contracting exercise. As such, including Ocean Rig’s premium property to our industry-leading fleet supplies us with an elevated variety of the fashionable and extremely environment friendly ultra-deepwater drillships most popular by our prospects, and higher positions us to capitalize on what, we imagine, is an imminent restoration within the ultra-deepwater market.” (Source: Transocean – Image: Eirik Raude semi-submersible/Ocean Rig)

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