Transocean Takeover Nets Three Offshore Drillers

Published at 03:28PM - 01/08/16

Transocean announced it has acquired two drillships and one semi-submersible rig following the acquisition of its subsidiary, Transocean Partners.

The deal will see Transocean acquire 51% in drillships Discoverer Inspiration, Discoverer Clear Leader and Development Driller III.

“We are excited about this merger, as it provides significant and immediate benefits to Transocean in the form of simplified administration and governance, tangible cost savings and improved liquidity,” Transocean President and Chief Executive Officer (CEO), Jeremy Thigpen, said.

Transocean Takeover Nets Three Offshore Drillers

“The contemplated all-equity transaction is entirely consistent with Transocean’s current liquidity objectives,” Thigpen added.

Under the agreement, Transocean Partners will be 100% owned by Transocean, which will indirectly provide Transocean with 51% ownership interests in the two drillships and the semi-sub rig.

Transocean Discoverer Clear Leader Ultra Deepwater Drillship
Transocean Discoverer Clear Leader Ultra Deepwater Drillship

Transocean agreed to acquire all the outstanding units of Transocean Partners that were not already owned by Transocean, in a share-for-unit merger transaction.

With this merger, Transocean Partners will receive 1.1427 Transocean shares in the merger, for each Transocean Partners common unit, while Transocean expects to issue approximately 22.7 million shares.

The completion of the transaction is conditioned upon approval by Transocean Partners’ common unitholders and is expected to close in the fourth quarter of the year.

Transocean Subsidiary Buyout 

Kathleen McAllister, Chief Executive Officer and Chief Financial Officer of Transocean Partners, said: “Transocean Partners common unitholders will benefit from a premium to the current unit price and receive shares in an entity with significant financial flexibility, a demonstrated access to capital and meaningfully improved market liquidity of its shares.”

She added: “Additionally, we expect that common unitholders will also benefit from Transocean’s significantly larger and more diverse fleet and its industry-leading contract backlog.”

Transocean had a difficult first half of the year, after having deferred the build of five new rigs until the first quarter of 2020, following an agreement with Keppel Marine & Offshore.

Earlier this year, the company also had two rig contracts cancelled, while one of its rigs, Sedco 702, was held for sale.