Houston -- U.S. offshore drilling firms Transocean Inc. and GlobalSantaFe Corp. said Monday they would merge, creating an oil and gas services company worth $53 billion.
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Transocean shareholders will receive $33.03 in cash and 0.6996 shares of the combined company for each share of Transocean they own, the companies said.
GlobalSantaFe shareholders will receive $22.46 in cash and 0.4757 shares of the combined company for each share of GlobalSantaFe they own.
The deal will also pay shareholders of both companies $15 billion through a recapitalization that will cut their current stakes in the firms.
The total number of shares outstanding of the combined company after the transaction will be approximately 318 million shares.
The new company, based in Houston, will be known as Transocean and be led by Transocean's current chief executive officer, Robert Long, the companies said. GlobalSantaFe CEO Jon Marshall will become president and operating chief.
It will own a global fleet of 146 rigs.
Transocean's market capitalization was $31.7 billion at Friday's close, while GlobalSantaFe's was $17 billion.
The companies said they expected the deal to close by the end of the year.
Copyright 2007 by United Press International.
Will Transocean's
Will Transocean's competition even exist after this deal? I just read that some of the board members of Transocean and GlobalSantaFe have some connections, which then could have had a lot do with these this acquisition(Check out Newsvisual's article: http://www.newsvisual.com/newsvisual/2007/07/board-ties-join.html). It will be intersting to see in the next few weeks how the other drilling companies respond- no doubt we'll be seeing a few more consolidations before too long.
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