(repeats story without change)
Copenhagen, Nov 10 (Businesshala) – Denmark’s Maersk Drilling and US rival Noble Corp will merge in a $3.4 billion deal to create one of the world’s largest offshore oil drilling rig companies, they said on Wednesday.
The combined company is expected to generate annual cost savings of $125 million and will be named Noble Corporation and headquartered in Houston, Texas, with ownership split approximately 50-50 between the two companies’ existing shareholders.
“The combination of Noble and Maersk Drilling will create a leading offshore driller with a global scale, a strong balance sheet and significant free cash flow generation capacity,” Noble Board Chairman Chuck Sledge said in a statement.
The transaction is supported by a majority of shareholders in both companies and that the shares of the new entity will be listed in both New York and Copenhagen, a joint statement said.
Noble’s chief executive Robert Eifler will become CEO of the merged business.
The company will maintain a significant operational presence in Stavanger, Norway, to maintain close proximity to customers and support operations in the Norwegian and wider North Sea regions.
The companies said without specifying numbers, the merger would result in job losses to help cut costs.
“In the short term, unfortunately, the combination will impact our organization, but it will also create a larger and stronger company, providing future opportunities for growth and new jobs,” said Maersk Drilling CEO Jorn Madsen.
The deal was “primarily” an all-shares transaction, although Maersk Drilling shareholders would have the ability to elect to receive cash rather than shares of up to $1,000 each, subject to an aggregate cap of $50 million.
A Maersk spokesman said the company had estimated the combined market capitalization of the two companies at around $3.4 billion.
“The combined company will maintain an industry-leading balance sheet, with significant cost synergies, a modern fleet and access to an international shareholder base,” said Robert Ugla, chief executive of AP Moller Holding, Maersk Drilling’s largest shareholder. (Reporting by Muralikumar Anantharaman and David Goodman in Oslo Editing by Jakob Gronholt-Pedersen in Copenhagen and Terje Solsvik in Oslo)