Seadrill Scoops Aquadrill in All-Stock Deal
Offshore rig owner expands deepwater fleet in a transaction valued at just under $1 billion.
Marine rig contractor Seadrill Limited, having emerged from its second bankruptcy in 5 years in February 2022, will acquire one-time affiliate Aquadrill in an all-stock transaction valued at $958 million.
The combination creates an offshore drilling company with one of the youngest and most technologically advanced fleets in the industry, and a combined backlog of $2.8 billion.
The company will own 12 floaters, including seven 7th generation drillships, three harsh environment rigs, four benign jack-ups, and three tender-assisted rigs. Seven of these rigs will be managed under a variety of strategic partnerships.
Aquadrill was previously known as Seadrill Partners, an asset-holding unit of Seadrill Ltd. Seadrill Partners emerged from bankruptcy protection under its new name in May 2021.
Upon completion of the transaction Seadrill shareholders and Aquadrill unitholders will own 62% and 38%, respectively, of the outstanding common shares in the company.
The company believes it will be well-placed to realize estimated annual run rate synergies of at least $70 million. All synergies are expected to be fully realized within 2 years of closing the transaction and are expected to be generated through a combination of management fee optimization; overhead cost savings; logistics, supply chain and inventory efficiencies; and capital expenditure savings.
“Seadrill and Aquadrill have a long and rich strategic and operational management history and our shared heritage will promote efficient integration of the two companies,” said Simon Johnson, Seadrill’s president and chief executive, in a statement.
The transaction has been approved by the Boards of Directors of both Seadrill and Aquadrill. Aquadrill’s unitholders approval has also been obtained. The transaction does not require Seadrill shareholder approval.
The transaction remains subject to applicable regulatory approvals and other customary conditions and is expected to close in mid-2023.
The combined company will remain named Seadrill Limited and will continue to be domiciled in Hamilton, Bermuda. Julie Robertson and Simon Johnson will continue in their respective roles as chair of the board of directors, and president and CEO.