Transocean, the world’s largest offshore drilling company, wants to buy Norway’s Aker Drilling, and Aker’s board of directors has unanimously recommended that its shareholders accept the offer, which is priced at about US $1.4 billion.
The offer price represents a 62% premium to Aker Drilling’s 30-day average price of NKR 16.39 per share. The transaction will be funded using existing cash balances and debt facilities. Transocean will assume US $800 million in Aker Drilling’s debt, which increases the total amount of the deal to $2.23 billion.
Transocean is seeking to grow its fleet of harsh-environment, ultra-deepwater rigs. Aker Drilling operates two harsh environment, ultra-deepwater, sixth-generation semi-submersible rigs currently on long-term contract to Statoil and Det Norske in Norway. In 2013, Aker Drilling is expected to take delivery of two sixth-generation drillships currently under construction at the DSME shipyard in Korea. The payment obligation when the drillships are delivered is $0.90 billion.
Aker Drilling will contribute approximately $1.05 billion in firm contract backlog. The transaction is also expected to be immediately accretive to Transocean’s earnings.
Steven Newman, Transocean’s president and CEO, commented, “Aker Drilling is an excellent strategic fit for Transocean. It allows us to enhance our position in Norway where we have enjoyed a long-term presence and excellent customer relationships. Aker Drilling's high-quality people and state-of-the-art offshore drilling fleet will ensure that we continue to deliver outstanding service to our customers. This transaction also demonstrates our commitment to enhancing shareholder value by continuing to invest in high-specification assets to drive long-term growth.”
Transocean owned the Deepwater Horizon rig that sank in the US Gulf of Mexico in April 2010 when it was drilling a well operated by BP. The explosion and fire killed 11 workers on board the rig, and 17 others were injured. The subsequent oil spill was one of the largest accidental spills in the history of the petroleum industry. Transocean and BP continue to battle over responsibility for the accident.