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Monday, July 23, 2007
In what could possibly be termed as the biggest merger in the drilling industry, Transocean and GlobalSantaFe have decided to join forces to become one really huge company. July 23 brought the news that the boards of the two companies had unanimously approved a definitive agreement for a merger of equals, making the value of the two companies combined about $53 billion.
The combined company, to be known as Transocean Inc., will retain principal offices in Houston and continue trading under the symbol RIG. With a combined fleet of rigs totaling 146 rigs, including five new builds. The combined company will have a huge presence in the rig market.
Under the terms of the agreement Transocean shareholders will receive $33.03 in cash and 0.6996 shares of the combined company for each share of Transocean they own. GlobalSantaFe shareholders will receive $22.46 in cash and 0.4757 shares of the combined company for each share of GlobalSantaFe they own. The total number of shares outstanding of the combined company after the transaction will be approximately 318 million shares.
Transocean CEO Robert L. Long will continue on in his position after the merger and GlobalSantaFe’s President and CEO John a. Marshall will serve as President and Chief Operating Officer of Transocean. Following the merger, Robert E. Rose, currently GlobalSantaFe’s Chairman, will serve as Transocean’s Chairman of the Board of Directors and other senior management positions will be named at a later date.
According to Long, "GlobalSantaFe’s outstanding rig fleet complements Transocean’s, and the combined company will have a global fleet of 146 rigs. This transaction will enhance our high-end floater fleet, including five newbuild ultra-deepwater units, while growing our position in the worldwide jackup market, especially in the Middle East, West Africa and the North Sea. In addition, we will be positioned to better offer the full scope of drilling services to customers in all geographical areas as we focus on incident-free, efficient operations and further developing our talented workforce. GlobalSantaFe has an outstanding management team, as well as operational and support staff, which when combined with Transocean’s will produce a top-notch team."
"This is an exciting opportunity for our shareholders, our customers and our people. The $15 billion cash payment allows us to achieve a more appropriate capital structure and deliver immediate value to our combined shareholders. The combined company will have a broader customer base, particularly with the increasingly important national oil companies, greater exposure to the growing deepwater business and increased, low-risk organic growth prospects from the combined deepwater newbuild program. The enhanced operational capability of a more geographically diverse rig fleet will produce significant benefits for our customers and provide substantial growth opportunities for our people. This is an ideal fit for the stakeholders in both companies,” said Marshall.
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