UK-based offshore driller Ensco has agreed to acquire US rival Atwood Oceanics in an all-stock transaction valued at about $839m.
Under the terms of the merger deal, Ensco will give Atwood shareholders 1.60 of its shares, valued at $10.72 per Atwood share.
Post merger, Ensco will hold around 69% stake in the combined offshore drilling company, valued at $6.9 bn. The remainder 31% will be owned by Atwood shareholders.
The definitive merger agreement, which has been approved unanimously by the board of directors of both the companies, comes without any financial conditions. However, the combined company will have around $3.7bn in revenue backlog.
Atwood CEO Rob Saltiel said: “The combination is an ideal strategic fit. Both companies are passionate about operational excellence, safety and customer satisfaction with core values and cultures that are perfectly aligned.
“We believe the combined company will offer an unmatched rig fleet and workforce. These attributes, anchored by a strong balance sheet, should enable the company to thrive as market conditions improve and allow Atwood shareholders to fully participate in the market recovery.”
For Ensco, the merger is expected to bolster its position as a leading offshore drilling contractor having exposure to both deep- and shallow-water regions across six continents. The consolidated offshore drilling company would cover major oil and gas markets such as Gulf of Mexico, Brazil, North Sea, Mediterranean, West Africa, Middle East and Asia Pacific.
Through the Atwood acquisition, Ensco will get an additional six ultra-deepwater floaters which is claimed to feature four highly capable drillships alongside five high-specification jackups.
Ensco CEO Carl Trowell said: “This acquisition significantly enhances our high-specification floater and jackup fleets, adding technologically advanced drillships and semisubmersibles, and refreshing our premium jackup fleet to best position ourselves for the market recovery.
“We believe that the purchase price for these assets represents a compelling value to our shareholders, which is augmented further by expected synergies from the transaction.”
According to Ensco, the combined entity will boast of a fleet of 63 rigs made up of shallow-water jackups, ultra-deepwater drillships to go along with different types of deep- and mid-water semisubmersibles.
It will also have a diverse customer base that includes 27 national and international oil companies along with independent operators.
Post merger, Ensco will continue to be based in the UK while senior executive officers will be working in London and Houston.
Subject to approvals from their respective shareholders and other customary requirements, the Ensco-Atwood merger is expected to be closed by the third quarter of the current year.
Image: Ensco to acquire rival offshore driller Atwood. Photo: courtesy of suwatpo/Freedigitalphotos.net.