Transocean buys Aker Drilling for $1.43bn to update its ageing fleet

 
City A.M. Reporter
DRILLING contractor Transocean is paying double the market price for Norway’s Aker Drilling to refresh its ageing fleet of drilling rigs and boost flagging orders.

Transocean, the owner and operator of the Deepwater Horizon rig at the centre of last year’s Gulf of Mexico oil spill disaster, is paying $1.43bn (£870m) or 26.50 crowns per Aker Drilling share, a 98.5 per cent premium to Friday’s close and 62 per cent above its 30-day average.

Transocean lost contracts in the second quarter and its profit fell as costs rose more quickly than the deepwater drilling industry could recover from the Gulf drilling ban following the Deepwater disaster.

The rig market off Norway, the world’s eighth-largest oil exporter, has been tight in recent months, with not enough rigs to cope with high demand for drilling.

The deal adds $1bn of contracts to Transocean’s books and is earnings enhancing, the company said.

By yesterday, Transocean owned or had agreements to take over 67.6 per cent of Aker shares – above the threshold for completing the deal.

The offer, recommended by the board, beat off interest from other parties, Aker said.

“Aker Drilling is an excellent strategic fit,” said Steven Newman, Transocean’s president and chief executive.