The UK’s Competition and Markets Authority (CMA) has officially accepted remedy measures taken by Maersk Drilling and Noble Drilling, enabling completion of their proposed merger.
The corporate regulator confirmed its “final undertakings” on the merger in a new judgement document published on Thursday.
The watchdog opened an investigation into the £2.6 billion merger in February, later warning of fears that the deal could increase costs and reduce service quality for oil and gas producers in the UK North Sea, particularly in the supply of jack-up rigs.
In response, Noble Corporation (NYSE: NE) and Maersk Drilling (CPH: DRLCO) signed a $375m deal to offload several units based in northwest Europe to a new subsidiary of Dubai-based Shelf Drilling to address the watchdog’s concerns.
The so-called “remedy rigs” include Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert and the Noble Lloyd Noble. Associated offshore and onshore staff are expected to transfer with the rigs.
The CMA said that these measures formed “as comprehensive a solution to [its] concerns as is reasonable and practicable” and would resolve the issue “in a clear-cut manner.”
Notably, under the regulator’s terms on “continued separation” the new entity is prohibited from holding, acquiring, re-acquiring or using any interest in the divested business for a period of 10 years, except without explicit permission from the CMA.
It also makes provision for an existing contract with Equinor related to the Noble Lloyd Noble rig, which Noble is expected to continue to perform under a bareboat charter arrangement with Shelf Drilling until Q2 2023, when the primary term of its current drilling contract is expected to end.
The charter agreement sees the economic benefit of this drilling contract passed to Shelf.
All onshore and offshore crews are expected to transfer with the sale of the rigs too, including all employees based at Noble’s Aberdeen office covering operational rig management, technical support, finance, HR, health and safety, supply chain, and sales and marketing.
Noble’s leased office and yard space in both Aberdeen and Stavanger, and in Qatar will also be transferred to shelf, if the new owner desires.
In its latest guidance to shareholders, Noble said it would establish a UK-incorporated holding company – Noble Corporation plc (Topco) – to complete the transaction.
The combined company will be named Noble Corporation plc, and all its shares will be listed on the New York Stock Exchange around 30 September, with a secondary listing on Nasdaq Copenhagen on 3 October.
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