Norwegian offshore drilling firm Seadrill has agreed to buy rival Aquadrill in an all-stock deal that values the latter at $958m.

Under the agreed terms, the unitholders of the UK-based Aquadrill will receive about 30.65 million shares of Seadrill.

This represents a 38% stake in the Norwegian firm, with Seadrill shareholders retaining the remaining 62%.

Seadrill expects the acquisition to create an ‘industry-leading offshore drilling company’, with a streamlined cost structure and modern and high specification fleet.

The enlarged Seadrill will have three harsh environment rigs; 12 floaters including seven 7th generation drillships; four benign jack-ups; and three tender-assisted rigs.

It will also own seven rigs, which will be managed under a variety of strategic partnerships.

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In a press statement, Seadrill said: “The Company will be well-placed to realise estimated annual run rate synergies of at least $70m. The Company will also be well-positioned for further growth given its stronger credit and liquidity profile, and to provide attractive cash flows.”

Upon deal completion, Aquadrill will become Seadrill’s wholly-owned subsidiary.

Aquadrill CEO Steven Newman said: “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 transaction is pending regulatory nod, with completion scheduled in mid-2023.

Seadrill expects nearly $70m in synergies annually through the deal.

The merged company is expected to have a combined order backlog of $2.8bn.

Seadrill president and CEO Simon Johnson said: “Seadrill and Aquadrill have a long and rich strategic and operational management history. Our shared heritage will promote efficient integration of the two companies. I look forward to welcoming the Aquadrill fleet back into the Seadrill family.”