Danish drilling rig operator Maersk Drilling has agreed to merge its operations with US-based offshore drilling contractor Noble Corporation in a primarily all-stock deal.

The combined company, called Noble Corporation, will be listed on the New York Stock Exchange and Nasdaq Copenhagen.

It will have a modern and high-end fleet of 20 floaters and 19 jack-up rigs across benign and harsh environments, serving customers in major offshore oil and gas basins.

Based in Houston, Texas, the combined entity will maintain a significant operating presence in Stavanger, Norway to better serve customers and support operations in the Norwegian sector and the wider North Sea.

It is expected to generate potential cost synergies of $125m per annum.

Upon closing of the transaction, the two companies’ shareholders will each own about 50% of the outstanding shares of the combined firm.

Maersk Drilling board chairman ClausHemmingsen, said: “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.”

With balanced representation from each of Noble and Maersk Drilling, the combined entity will consist of a seven-member board of directors.

Upon completion of the deal, Noble president and CEO Robert Eifler will serve as president and CEO for the combined company.

Maersk Drilling CEO Jørn Madsen said: “Noble is the right match for Maersk Drilling, and the combination makes a lot of sense. I’m proud that Maersk Drilling’s strong heritage in the North Sea, unparalleled operational excellence and competencies, industry-leading sustainability position and commitment to innovation will contribute to creating a world-class driller with an unmatched expertise within deepwater and harsh environment drilling.

“In the short term, the combination will, unfortunately, impact our organisation, but it will also create a larger and stronger company, which will provide future opportunities for growth and new jobs.”

Subject to regulatory approvals and other customary conditions, the deal is expected to complete in mid-2022.