Noble Corporation is set to buy Diamond Offshore Drilling in a stock-and-cash deal valued at $1.6 billion as the oil and gas mergers continue with the oilfield services sector.
Noble and Diamond Offshore said on Monday that they had entered into a definitive merger agreement under which Noble will acquire Diamond in a stock plus cash deal. As part of the transaction, Diamond shareholders will receive 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond stock.
The implied cash and stock consideration to be received by Diamond shareholders is $15.52 per share, representing a premium of 11.4% to Diamond's closing share price on June 7, 2024.
Noble plans to fund the cash portion of the transaction through new debt financing, which it has secured through a $600 million committed bridge financing facility, the company said.
The two companies said they have highly complementary fleets and customer coverage and expect meaningful cost synergies. With the acquisition, Noble will own and operate a fleet of 41 rigs including 28 floaters and 13 jackups. The backlog for the combined company would be approximately $6.5 billion as of today, with a wide diversity of customers and regions of operation, the companies said.
The deal is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and the approval of Diamond shareholders. The transaction is expected to close by the first quarter of 2025.
"Supported by Diamond's $2.1 billion of backlog and $100 million of anticipated cost synergies, we expect the transaction to be immediately accretive to our free cash flow per share and contribute to accelerated growth in our return of capital to shareholders," said Noble's President and CEO Robert Eifler.
The Noble-Diamond Offshore deal is not the first transaction in the oilfield services sector this year.
In early April, SLB, the world's top oilfield services provider, announced a definitive agreement to buy smaller competitor ChampionX Corporation in an all-stock deal valued at $7.75 billion.
By Tsvetana Paraskova for Oilprice.com
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