Transocean to merge with Songa Offshore

Swiss offshore drilling giant Transocean said on Tuesday that it had reached an agreement to acquire Norwegian competitor Songa Offshore in a voluntary exchange offer with an estimated value of USD 3.4 billion.

After the merger, the company will boast a total of 51 mobile offshore drilling rigs including 30 ultra-deepwater floaters, 11 harsh-environment floaters, three deepwater floaters and seven mid-water floaters, Transocean said in a statement.

“With this combination, we add four new state-of-the-art Cat-D semi-submersible rigs to our existing fleet, further enhancing our position in the harsh environment market,” said Jeremy D. Thigpen, president and CEO of Transocean.

“We also demonstrate our continued commitment to the Norwegian market and strengthen our technical and operational presence in that region. Importantly, we add approximately USD 4.1 billion in contract backlog to our already industry-leading backlog of USD 10.2 billion, which provides us with even more visibility to future cashflows in this challenging market.”

The transaction value includes USD 1.7 billion of Songa Offshore’s debt, which Transocean will assume, and a 37% premium to the average closing price of Songa Offshore’s shares over a five-day period. The equity value of the Norwegian firm implied in the consideration is USD 1.2 billion.