Noble Corporation and Maersk Drilling have entered into a merger agreement to combine businesses in a primarily all-stock transaction valued at $3.4 billion.
Following completion of the deal, Noble and Maersk Drilling shareholders will each own approximately 50% of the outstanding shares of the combined company. The combination is expected to generate estimated annual cost savings of $125 million. The combined company, to be called Noble Corporation, will boast a rig fleet comprised of 20 floating units and 19 jackup rigs across benign and harsh environments.
“Both Noble and Maersk Drilling have many decades of history as leaders in the offshore drilling industry,” said Robert W. Eifler, Noble president and chief executive, who will lead the combined company. “I look forward to the future as these two great organizations come together to create a stronger combined company."
The Maersk deal marks Noble’s second merger since emerging from Chapter 11 bankruptcy this past February. In late March, the driller said it would combine with rival Pacific Drilling in an all-stock, no-debt deal. The acquisition enhanced Noble’s ultradeepwater drillship fleet.
The Noble-Maersk merger agreement has been unanimously approved by the Boards of Directors of both companies, and the transaction is also supported by Noble’s top three shareholders, which collectively currently own about 53% of Noble shares, and APMH Invest A/S which currently owns around 42% of the share capital and votes of Maersk Drilling. In addition, certain foundations related to APMH Invest A/S, which currently own approximately 12% of the share capital and votes of Maersk Drilling, support the transaction.
“Noble is the right match for Maersk Drilling, and the combination makes a lot of sense,” said Jørn Madsen, chief executive of Maersk Drilling. “I’m proud that Maersk Drilling’s strong heritage in the North Sea, unparalleled operational excellence and competencies, industry-leading sustainability position, and commitment to innovation will contribute to creating a world-class driller with an unmatched expertise within deepwater and harsh environment drilling.”
Madsen added that in the short term, the combination will “impact our organization,” which means job losses. Neither company specified how many jobs may be cut as a result of the business combination.
The transaction is targeted to close in mid-2022.
