Transocean Ltd. and Ocean Rig UDW Inc. introduced that they’ve entered right into a definitive merger settlement beneath 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 10-day quantity weighted common share value. The transaction has been unanimously accredited by the board of administrators of every firm.

Transocean intends to fund the money portion of the transaction consideration by a mixture of money readily available and absolutely dedicated financing offered by Citi. The merger isn’t 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 atmosphere semisubmersibles. Additionally, its fleet contains two high-specification ultra-deepwater drillships at the moment beneath 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 transaction, which is anticipated to be accomplished through the first quarter of 2019, is topic to the approval of each Transocean and Ocean Rig shareholders and the satisfaction of customary closing circumstances, together with relevant regulatory approvals. The merger isn’t topic to any financing situation.

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Also, per the Company’s technique of recycling much less aggressive rigs, Transocean will retire two of its floaters, the ultra-deepwater drillship C.R. Luigs and the midwater floater Songa Delta. The rigs will likely be labeled as held on the market and will likely be recycled in an environmentally accountable method. Both floaters are at the moment stacked. Transocean anticipates re-ranking the mixed fleet, which can lead to further rigs being recycled.


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