Transocean to buy Songa Offshore for $1.2bn

The acquisition of 100% of the issued and outstanding shares of Songa Offshore is valued at NOK9.1bn ($1.2bn), based on NOK47.5 per share representing a 37% premium to Songa Offshore’s five-day average closing price of NOK34.68 per share.

The enterprise value will be around $3.4bn including $1.7bn of Songa Offshore’s debt.

Among Songa Offshore’s seven drilling rigs, four of them are currently on long term contracts with Statoil in Norway.

The combined company will operate a fleet of 51 mobile offshore drilling units with a backlog of $14.3bn consisting of 30 ultra-deepwater floaters, 11 harsh environment floaters, three deepwater floaters and seven mid-water floaters.

Transocean has an additional four ultra-deepwater drillships under construction, including two contracted with oil major Shell for 10 years each.

Jeremy D. Thigpen, president and ceo of Transocean. 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.”

Frederik Wilhelm Mohn, chairman of Songa Offshore, said: “By adding Songa Offshore’s four Cat-D rigs to Transocean’s existing harsh environment fleet, the combined company will be the leader within this segment which is showing signs of recovery.”

Transocean will first acquire at least 90% of Songa Offshore shares before making a compulsory acquisition of the remaining shares as well as a move to delist Songa Offshore from the Oslo Stock Exchange.

The deal is expected to be completed during the fourth quarter of this year.

Transocean stated that Songa Offshore will remain headquartered in Zug, Switzerland, and no changes to its executive management team or corporate structure are anticipated.

As part of the transaction, Transocean intends to establish a harsh environment center of excellence in Norway to the extent of being practical and commercially viable, which could support other harsh environment markets.

Add Seatrade Maritime News to your Google News feed.