Transocean Inc. and GlobalSantaFe Corporation announce that their boards of directors have unanimously approved a definitive agreement for a merger of equals. Based upon closing prices for each company’s ordinary shares as of July 20, 2007, the estimated enterprise value of the combined company would be approximately $53 billion. The combined company, to be known as Transocean Inc., will retain principal offices in Houston and trade on the New York Stock Exchange with the symbol RIG.
Under the terms of the agreement, Transocean shareholders will receive $33.03 in cash and 0.6996 shares of the combined company for each share of Transocean they own. On the other hand, GlobalSantaFe shareholders will receive $22.46 in cash and 0.4757 shares of the combined company for each share of GlobalSantaFe they own. The total number of shares outstanding of the combined company after the transaction will be approximately 318 million shares.
The combination will create an organization with approximately 20,000 personnel, providing a full range of offshore drilling services in the world’s key regions. The combined company will have a technologically advanced fleet with a substantial presence in ultra-deepwater and deepwater drilling and additional growth from newbuild rigs.
Robert L. Long, who will continue to serve as Chief Executive Officer of Transocean after the merger, said, "GlobalSantaFe’s outstanding rig fleet complements Transocean’s, and the combined company will have a global fleet of 146 rigs. This transaction will enhance our high-end floater fleet, including five newbuild ultra-deepwater units, while growing our position in the worldwide jackup market, especially in the Middle East, West Africa and the North Sea. In addition, we will be positioned to better offer the full scope of drilling services to customers in all geographical areas as we focus on incident-free, efficient operations and further developing our talented workforce. GlobalSantaFe has an outstanding management team, as well as operational and support staff, which when combined with Transocean’s will produce a top-notch team."
Current GlobalSantaFe President and CEO Jon A. Marshall, who will serve as Transocean’s President and Chief Operating Officer following the merger, said, "This is an exciting opportunity for our shareholders, our customers and our people. The $15 billion cash payment allows us to achieve a more appropriate capital structure and deliver immediate value to our combined shareholders. The combined company will have a broader customer base, particularly with the increasingly important national oil companies, greater exposure to the growing deepwater business and increased, low-risk organic growth prospects from the combined deepwater newbuild program. The enhanced operational capability of a more geographically diverse rig fleet will produce significant benefits for our customers and provide substantial growth opportunities for our people. This is an ideal fit for the stakeholders in both companies."
Following the merger, Robert E. Rose, currently GlobalSantaFe’s Chairman, will serve as Transocean’s Chairman of the Board of Directors, Robert L. Long will continue as Transocean’s Chief Executive Officer and Jon A. Marshall will assume the position of President and Chief Operating Officer. Other senior management positions will be named later.