Transocean to acquire Songa Offshore for $3.4bn
Offshore contract drilling services provider Transocean has agreed to acquire 100% of the issued and outstanding shares in Songa Offshore for a sum of approximately Nkr26.4bn ($3.4bn).
The acquisition is expected to strengthen Transocean’s fleet by incorporating Songa Offshore’s four ‘Cat-D’ harsh environment, semisubmersible drilling rigs, which are currently on long-term contracts with Statoil in Norway.
Songa Offshore’s portfolio also includes three additional semisubmersible drilling rigs.
Transocean president and CEO Jeremy Thigpen said: “With this combination, we add four new state-of-the-art Cat-D semisubmersible rigs to our existing fleet, further enhancing our position in the harsh environment market.
“Importantly, we add approximately $4.1bn in contract backlog to our already industry-leading backlog of $10.2bn, which provides us with even more visibility to future cash flows in this challenging market.”
The combined company will possess 51 mobile offshore drilling units following the completion of the transaction, including 30 ultra-deepwater floaters, 11 harsh environment floaters, three deepwater floaters and seven midwater floaters.
Transocean also has four ultra-deepwater drillships, which are currently under construction.
Songa Offshore chairman Frederik Wilhelm Mohn said: “The combination of Songa Offshore and Transocean is a strategic fit.
"The combined company will have an unparalleled backlog backed by strong counterparties.”
Transocean is planning to build a harsh environment centre of excellence in Norway as part of the agreement, based on practical and commercial viability.
Transocean’s executive management team and corporate structure will remained unchanged following the acquisition.
The transaction's total value comprises $1.7bn net assumed Songa Offshore debt, $660m estimated Transocean convertible bond, $540m estimated Transocean equity and $480m estimated Transocean cash.
It is expected to close in the final quarter of this year.
Image: Greenway Plaza, the location of Transocean's Houston offices. Photo: courtesy of WhisperToMe via Wikipedia.