Offshore Firms Ensco and Rowan to Merge
October 08 2018 - 8:20AM
Dow Jones News
By Micah Maidenberg
Offshore driller Ensco PLC has agreed to buy Rowan Cos., a deal
the companies say will help them win business as the offshore oil
market starts to grow again.
Under terms of the deal, Rowan shareholders will receive 2.215
Ensco shares for each of their Rowan shares. The deal would offer
Rowan shareholders roughly no premium based on Friday's closing
price of $18.78. Ensco stockholders will own 60.5% of the combined
company, with Rowan shareholders owning the remaining.
Ensco's market capitalization is currently $3.7 billion, while
Rowan's is $2.4 billion, according to FactSet.
The deal is expected to close in the first half of next
year.
As oil prices rise and some analysts predict the per-barrel
price could reach $100, oil companies are anticipating a stronger
environment for expensive offshore projects.
Ensco Chief Executive Carl Trowell, who will serve as executive
chairman of the combined company said in prepared remarks that
stakeholders in the combined firm will share in "meaningful cost
savings and even greater upside to improving market conditions as
the industry recovery continues gaining momentum."
The merged firm expects to save around $150 million in pre-tax
expenses.
Ensco shareholders will also gain exposure to a joint venture
that Rowan has entered into with Saudi Aramco, Mr. Trowell
added.
Rowan's current CEO, Tom Burke, will serve in that role at the
combined company, which will be based in the U.K.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
October 08, 2018 08:05 ET (12:05 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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