The Drilling Company of 1972 A/S announced that it has entered into a definitive agreement to combine with Noble Corporation (“Noble”) in a primarily all-stock transaction. The combined company will be named Noble Corporation, and its shares will be listed on the New York Stock Exchange and Nasdaq Copenhagen. The transaction is targeted to close in mid-2022.
The Drilling Company of 1972 A/S (“Maersk Drilling”) today announced that it has entered into a definitive agreement to combine with Noble Corporation (“Noble”) in a primarily all-stock transaction. The combined company will be named Noble Corporation, and its shares will be listed on the New York Stock Exchange and Nasdaq Copenhagen. The transaction is targeted to close in mid-2022.
Both companies share a very strong conviction in the compelling industrial logic behind the creation of a world class offshore driller with the scale, capabilities, and resources to successfully serve a broad range of customers. The combined company will own and operate a modern, high-end fleet of floaters and jack-up rigs across benign and harsh environments, serving customers in the most attractive offshore oil and gas basins. The transaction will unite the strong capabilities and decades of experience of Noble and Maersk Drilling, leveraging their differentiated value propositions and unwavering commitments to best-in-class safety and service quality.
The business combination agreement has been unanimously approved by the Boards of Directors of Noble and Maersk Drilling, and it is also supported by major shareholders of both companies, including Noble’s top three shareholders, which collectively currently own approximately 53% of Noble shares, and APMH Invest A/S, which currently owns approximately 42% of the share capital and votes of Maersk Drilling. In addition, certain foundations related to APMH Invest A/S, which currently own approximately 12% of the share capital and votes of Maersk Drilling, have expressed their intention to support the transaction.
The combination is expected to generate potential cost synergies of USD 125 million per year with full potential to be realized within two years after closing of the transaction. The combined company will benefit from a diverse revenue mix, a robust contract backlog with significant earnings visibility, a solid balance sheet, and a strong free cash flow potential, supporting the potential for return of capital to shareholders while providing resiliency through the industry cycle.
Leadership, locations and listing
The combined company will have a seven-member Board of Directors with balanced representation from each of Noble and Maersk Drilling. Initially, the Board of Directors will be comprised of three directors appointed by Noble and three directors appointed by Maersk Drilling, one of whom will be the current Chairman of the Board of Maersk Drilling, Claus V. Hemmingsen. Noble and Maersk Drilling will jointly appoint Charles M. (Chuck) Sledge the Chairman of the Board of Directors of the combined company.
It has been agreed that Robert W. Eifler, Noble’s President and CEO will become President and CEO of the combined company upon closing of the transaction. Robert W. Eifler will also be a member of the Board of Directors.
The combined company will be headquartered in Houston, Texas, and will maintain a significant operating presence in Stavanger, Norway, to retain proximity to customers and support operations in the Norwegian sector and the broader North Sea, and to ensure continued access to talent.
Transaction terms and structure
The combination is a primarily all-stock transaction where the shares of the combined company will be distributed equally between the current shareholders of Noble and Maersk Drilling. The transaction will be implemented through an English incorporated holding company, which will make a voluntary tender exchange offer to the shareholders of Maersk Drilling. The tender exchange offer will allow Maersk Drilling’s shareholders to exchange each Maersk Drilling share for 1.6137 shares in the new holding company. Upon the closing of the transaction, the shareholders of Maersk Drilling and Noble will each own approximately 50% of the outstanding shares of the new holding company.
Although the agreement primarily is an all-stock transaction, Maersk Drilling shareholders will have the ability to elect to receive cash instead of shares in the new holding company for up to USD 1,000 paid in DKK, subject to an aggregate cash consideration cap of USD 50 million (excluding any cash paid for fractional shares). As a consequence, Maersk Drilling shareholders’ overall shareholding in the new holding company upon completion of the offer may be reduced below 50% to the extent that Maersk Drilling shareholders choose to elect the cash option over shares.
The offer and disclosure documents to be distributed to Maersk Drilling shareholders are expected to be published in the first half of 2022.
The transaction is subject to Noble shareholder approval, acceptance of the exchange offer by holders of at least 80% of Maersk Drilling’s shares, merger clearance and other regulatory approvals, listings on New York Stock Exchange and Nasdaq Copenhagen, and other customary conditions.
About Noble
Noble is a leading offshore drilling contractor for the oil and gas industry. The Company owns and operates one of the most modern, versatile, and technically advanced fleets in the offshore drilling industry. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921. Currently, Noble performs, through its subsidiaries, contract drilling services with a fleet of 20 offshore drilling units, consisting of 12 drillships and semisubmersibles and eight jackups, focused largely on ultra-deepwater and high-specification jackup drilling opportunities in both established and emerging regions worldwide.
About Maersk Drilling
With more than 45 years of experience operating in the most challenging offshore environments, Maersk Drilling (CSE:DRLCO) provides responsible drilling services to energy companies worldwide. Maersk Drilling owns and operates a fleet of 19 offshore drilling rigs and specialises in harsh environment and deepwater operations. Headquartered in Denmark, Maersk Drilling employs around 2,400 people.
