Transocean To Buy Norwegian Rig Firm Songa Offshore For $1.1B
OSLO, Aug 15 (Reuters) - Transocean, one of the world's biggest drilling rig operators, has agreed to buy Norwegian competitor Songa Offshore for 9.1 billion crowns ($1.1 billion), the latest in a series of transactions reshaping the industry.
The purchase, to be mostly paid for in shares and convertible bonds, follows Ensco Plc's acquisition of smaller drilling rival Atwood Oceanics Inc in an all-stock deal valued at about $839 million in May.
It also boosts Swiss-based Transocean's position in drilling in harsh climates such as the Arctic, as Songa is Norwegian oil major Statoil's top drilling service provider.
The offer values Songa shares at 47.50 Norwegian crowns each, a 39.7 percent premium over Monday's closing price, the two companies said in a joint statement on Tuesday.
"It (the Transocean deal) is a sign that we are near the bottom of the market, and people don't expect asset prices to fall much further," Swedbank analyst Magnus Olsvik said.
"For Transocean, it's a strategic acquisition," he added.
The deal boosts Transocean's position in harsh-environment drilling and increases its order book by $4.1 billion to $14.3 billion.
Four out of seven Songa rigs are on long-term contracts with Statoil, making the deal especially attractive.
Including debt, the transaction sets Songa's enterprise value at 26.4 billion crowns, or close to $3.4 billion.
Songa Shares Soar
Shares in Songa surged 35 percent on news of the deal, which needs the backing of at least 90 percent of Songa shareholders. About 77 percent of shareholders have so far agreed to the offer, the company said.
By 1228 GMT, Songa shares were up 30.3 percent at 44.3 crowns, their highest since March 2016.
Songa's biggest shareholder, Perestroika, owned by Norwegian investor Frederik Wilhelm Mohn, would become the largest shareholder in Transocean as a result of the acquisition with a stake of about 12 percent, the firms said.
Mohn, chairman of Songa, will be nominated for a seat on Transocean's board.
In March, Transocean sold its fleet of shallow water jack-up rigs to Norway's Borr Drilling for $1.35 billion, saying it wanted to focus on its core deep- and ultra-deepwater rig market.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension