Seadrill (NYSE: SDRL) has announced it will acquire rival rig owner Aquadrill in an all-share deal worth nearly $1 billion.
Completion will see the combined company own 12 floating vessels, including seven 7th generation drillships, three harsh environment rigs, four jackups and three tender-assisted rigs.
Seadrill said Aquadrill will become its subsidiary and expects “achievable synergies” of at least $70m annually form the deal.
Upon completion, Seadrill shareholders will own 62% of the combined business, with the remaining 38% held by Aquadrill holders.
The firm said it aims to close the merger in “as short order as is possible“.
Based on Seadrill’s 30-day average share price, the deal is worth around $958m, it said.
Simon Johnson, CEO of Seadrill, said: At Seadrill we seek to deliver safe and effective operations as the bedrock for generating returns for our shareholders. Seadrill and Aquadrill have a long and rich strategic and operational management history. Our shared heritage will promote efficient integration of the two companies.”
The deal has been approved by both companies’ boards and does not require Seadrill shareholder approval.
Aquadrill CEO Steven Newman added: “We believe this combination will create the most value for our shareholders and will create an excellent platform for high quality service delivery to our customers.”
The combined company will remain named Seadrill Limited and will continue to be domiciled in Hamilton, Bermuda.
Julie Robertson and Simon Johnson will continue in their respective roles as Chair of the Board of Directors, and President and Chief Executive Officer.
Citi is serving as sole financial advisor and Baker Botts L.L.P. and Advokatfirmaet Thommessen AS are serving as legal counsel to Seadrill. Intrepid Partners, LLC is serving as sole financial advisor and Akin Gump Strauss Hauer & Feld LLP and Advokatfirmaet Schjødt AS are serving as legal counsel to Aquadrill.
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