Overview:
- Noble Corporation plc (Noble) and Diamond Offshore Drilling, Inc (Diamond) have agreed to merge.
- Noble will acquire Diamond through a mix of stock and cash.
- Diamond shareholders will get 0.2316 shares of Noble plus $5.65 in cash per Diamond share.
- This offer is 11.4% higher than Diamond’s stock price on June 7, 2024.
- After the merger, Diamond shareholders will own about 14.5% of Noble’s shares.
Key Points:
- Leadership Statements:
- Noble’s CEO, Robert Eifler, highlighted that the merger will boost Noble’s capabilities, adding advanced drillships and rigs, and improve financial strength with Diamond’s contracts and cost savings.
- Diamond’s CEO, Bernie Wolford, emphasized the benefits for Diamond shareholders, including increased value and access to Noble’s strong dividend program.
- Diamond’s Chairman, Neal P. Goldman, expressed pride in the merger, which he believes will continue to add value.
- Financial Aspects:
- Noble’s Board approved a 25% increase in its quarterly dividend, raising it to $0.50 per share from the third quarter of 2024.
Reasons for the Merger:
- Complementary Fleets: Noble’s advanced drillships and Diamond’s high-spec rigs create a strong combined fleet.
- Shared Values: Both companies prioritize safety, operational excellence, and customer service, aiding smooth integration.
- Combined Backlog: The merger will result in a robust backlog of $6.5 billion, ensuring financial stability and growth.
- Cost Savings: Noble expects to save $100 million annually from the merger.
- Increased Cash Flow: The merger will immediately boost Noble’s free cash flow per share, benefiting shareholders.
Terms of the Merger:
- Diamond shareholders will receive Noble shares and cash totaling $15.52 per Diamond share.
- The merger includes $600 million in cash paid to Diamond shareholders.
- Noble will finance the cash part of the deal through new debt.
- One Diamond board member will join Noble’s board after the merger.
- The merger is subject to regulatory approvals and is expected to be completed by early 2025.
- Both companies’ boards have unanimously approved the merger.
Impact on Noble:
- Post-merger, Noble will operate 41 rigs, including advanced drillships and jackups.
- The combined company will have a diversified customer base and operations in various regions.
- Noble is committed to maximizing value for its stakeholders, maintaining safety and efficiency, and prioritizing shareholder returns through disciplined capital allocation.
Dividend Details:
- Noble will pay a $0.50 per share dividend in the third quarter of 2024.
- This is in addition to a previously announced $0.40 dividend for June 2024.
- Future dividends will continue on a quarterly basis, and the third-quarter dividend annualizes to $2.00 per share.
- Dividends will be paid in USD, but shareholders trading on NASDAQ Copenhagen will receive equivalent payments in Danish Krone, subject to exchange rate fluctuations.
Advisors:
- Financial and legal advisors from several firms are assisting both Noble and Diamond in the merger process.
About Noble Corporation
Noble is a top offshore drilling contractor within the oil and gas sector. The company possesses and manages one of the most contemporary, adaptable, and technologically sophisticated fleets in the industry. Noble and its forerunners have been involved in contract drilling of oil and gas wells since 1921. Through its subsidiaries, Noble provides contract drilling services utilizing a fleet of offshore drilling units, concentrating mainly on ultra-deepwater and high-specification jackup drilling opportunities in both well-established and emerging regions across the globe.
About Diamond Offshore Drilling
- Operational Excellence: Diamond Offshore prioritizes the highest standards of operational integrity and quality, with a strong focus on health, safety, environmental protection, and compliance.
- Global Drilling Leader: The company is a global frontrunner in offshore drilling, offering contract drilling services with a fleet of 12 rigs, including eight semisubmersibles and four drillships.
- Innovative Approach: They are dedicated to responsibly unlocking energy resources and are known for their innovative solutions to complex deepwater drilling challenges.
- Strategic Investments: Diamond Offshore has made significant investments in their fleet and people, ensuring long-term shareholder value through excellent operational performance and a disciplined investment strategy.
This summary captures the essence of Diamond Offshore’s commitment to excellence, innovation, and strategic growth in the offshore drilling industry.
Summary
