Two offshore drilling contractors, Maersk Drilling and Noble Corporation, have agreed to create a combined company with a fleet of 20 floaters and 19 jack-up rigs via a primarily all-stock transaction.
According to a mutual statement, Maersk Drilling and Noble Corp shareholders will each own approximately 50 percent of the outstanding shares of the combined company. The combined company will be named Noble Corporation and its shares will be listed on the New York Stock Exchange and Nasdaq Copenhagen.
“Noble and Maersk Drilling share a very strong conviction about the compelling industrial logic for taking this step to create a differentiated offshore drilling company with the scale, capabilities, and resources to successfully serve a broad range of customers.
“The combined company will have a modern, high-end fleet of floaters and jack-up rigs across benign and harsh environments able to meet the needs of customers in the most attractive oil and gas basins.
“This transaction will unite and leverage the strong capabilities of Noble and Maersk Drilling, which both have decades of experience, differentiated value propositions, and unwavering commitments to best-in-class safety and service quality,” the two companies claimed in the statement.
The combination is expected to generate estimated annual run-rate synergies of $125 million, which will create significant value for shareholders. The combined company will benefit from a diverse revenue mix, a robust contract backlog with significant earnings visibility, a solid balance sheet, and a strong free cash flow potential, supporting the potential for return of capital to shareholders while providing resiliency through the cycle.
The business combination agreement has already been unanimously approved by the boards of directors of Noble and Maersk Drilling. According to some estimates, the combined market capitalization of the two companies is estimated at approximately $3.4 billion.
“The combination will create value for all shareholders and will offer investors a unique opportunity to benefit from the market recovery, a robust financial position, and strong free cash flow potential, all paving the way for the potential return of capital to shareholders,” Maersk Drilling’s Chairman Claus V. Hemmingsen said.
“The combination of Noble and Maersk Drilling will create a leading offshore driller with global scale, a strong balance sheet, and significant free cash flow generation potential. The transaction will be accretive to free cash flow per share, and I am confident that this combination will deliver meaningful value to all shareholders,” Noble’s chairman Charles M Sledge added.
It is worth adding that, upon the closing of the transaction, Noble’s president and CEO Robert W Eifler will become president and CEO of the combined company and will be a member of the board of directors.
The new seven-member board of directors will be comprised of three directors designated by Noble, three directors designated by Maersk Drilling, and Eifler as the company’s CEO. Charles Sledge will be the chairman of the board, jointly appointed by Noble and Maersk Drilling.
For more information visit www.noblecorp.com
