The aggregate value of the transaction is approximately $3.1 billion, an implied premium of 34.7% over Veritas’ 30-day average closing price for the period ending on August 29, 2006.
Compagnie Generale de Geophysique (CGG) stated that it believes the transaction features strong business, geographic and client fit, with expected pre-tax run rate synergies estimated at approximately $65 million per annum.
The combination of CGG and Veritas is expected to create a strong global pure-play seismic company, offering a broad range of seismic services, and geophysical equipment, through Sercel, to the industry across all markets.
With a combined workforce of approximately 7,000 staff operating worldwide, including Sercel, CGG claims the future group would provide, through continued innovation, the industry benchmark for seismic technology and services to a broad base of customers including independent, international and national oil companies.
The boards of directors of both companies have unanimously approved the transaction, which, following shareholder and regulatory approvals, would see the combined group operate under the name CGG-Veritas. The transaction is expected to be completed around year-end.
