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The drilling ship Noble Globetrotter II off the coast of Varna, Bulgaria

Stock Photo: Dina Rogatnykh / Shutterstock.com

Noble Corporation to Acquire Diamond Offshore Drilling in a Landmark Deal

Mike Schuler
Total Views: 543
June 10, 2024

Noble Corporation plc and Diamond Offshore Drilling, Inc have announced their decision to merge. As per the agreement, Noble will acquire Diamond in a transaction involving both stock and cash valued at $1.59 billion.

Diamond shareholders are set to receive 0.2316 Noble shares, along with $5.65 in cash for every Diamond share they own, marking an 11.4% premium on Diamond’s closing stock price as of June 7, 2024. Post the merger, Diamond shareholders will hold about 14.5% of the outstanding shares of Noble Corporation.

Following the acquisition, Noble will command a fleet of 41 rigs, including 28 floaters and 13 jackups, and a backlog of approximately $6.5 billion.

“This acquisition enables Noble to continue our journey of delivering superior innovation and value to a broad range of the leading offshore operators across the world,” said Noble’s President and Chief Executive Officer, Robert Eifler. “Our position will be strengthened with the addition of four 7th generation drillships and one of the most high-spec harsh environment semisubmersible rigs in the world.”

The merger also means that Noble’s Board of Directors has approved a 25% increase in its quarterly dividend to $0.50 per share, which will be effective from the third quarter of 2024.

The combination of these two companies creates a leading fleet of highly-advanced drillships, comprising 14 working (15 total) dual BOP 7th generation drillships, and a diversified customer base across the globe and various rig types. This, along with their shared commitment to safety, operational excellence, and customer service, ensures a seamless integration process. The combined backlog of $6.5 billion, including Diamond’s $2.1 billion, will be significantly accretive per share and per rig.

“This combination is an ideal outcome that provides Diamond shareholders both immediate and long-term upside potential as part of a more fully scaled platform that can deliver customer and shareholder value on a through-cycle basis, more visibly and accessibly, while gaining access to Noble’s robust dividend program,” said Diamond’s President and Chief Executive Officer, Bernie Wolford.

Noble anticipates an annual pre-tax cost savings of $100 million, with 75% expected to materialize within a year of the deal’s closing. This transaction is set to considerably boost Noble’s free cash flow per share, allowing for more capital to be returned to shareholders.

The deal, which has been unanimously approved by the Board of Directors of both companies, is subject to customary closing conditions, including the receipt of mandatory regulatory approvals and the approval of Diamond shareholders. The completion of the merger is expected by the first quarter of 2025.

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