Transocean Ltd. Announces Agreement to Acquire Ocean Rig

  • Enhances Transocean’s position as the leader in ultra-deepwater and harsh environment drilling;
  • Adds nine high-specification ultra-deepwater drillships, two harsh environment semisubmersibles, and two high-specification ultra-deepwater drillships currently under construction;
  • Results in a combined fleet of 57 floaters, with 17 of the top 50 and 31 of the top 100 ultra-deepwater drillships in the industry(1);
  • Enhances Transocean’s exposure to, and ability to capitalize on, the ultra-deepwater market recovery;
  • Increases Transocean’s industry-leading contract backlog by $743 million for a combined total of $12.5 billion, at an average dayrate of $413,000;
  • Expected annual cost synergies of approximately $70 million;
  • The transaction has been unanimously approved by the board of directors of each company; and
  • The top four Ocean Rig shareholders (representing approximately 48% of Ocean Rig’s outstanding shares), all of Ocean Rig’s directors that own shares of Ocean Rig, and Transocean’s third largest shareholder, Perestroika (Cyprus) Ltd., controlled by current Transocean board member, have executed voting and support agreements.

STEINHAUSEN, Switzerland and GRAND CAYMAN, Cayman Islands, Sept. 04, 2018 (GLOBE NEWSWIRE) -- Transocean Ltd. ("Transocean" or the “Company”) (NYSE: RIG) and Ocean Rig UDW Inc. (“Ocean Rig”) (NASDAQ: ORIG) announced today that they have entered into a definitive merger agreement under which Transocean will acquire Ocean Rig in a cash and stock transaction valued at approximately $2.7 billion, inclusive of Ocean Rig’s net debt.

The transaction consideration is comprised of 1.6128 newly issued shares of Transocean plus $12.75 in cash for each share of Ocean Rig’s common stock, for a total implied value of $32.28 per Ocean Rig share, based on the closing price on August 31, 2018. This represents a 20.4% premium to Ocean Rig’s ten-day volume weighted average share price. The transaction has been unanimously approved by the board of directors of each company.

Transocean intends to fund the cash portion of the transaction consideration through a combination of cash on hand and fully committed financing provided by Citi. The merger is not subject to any financing condition.

Upon completion of the merger, Transocean’s and Ocean Rig’s shareholders will own approximately 79% and approximately 21%, respectively, of the combined company.

Ocean Rig’s fleet is comprised of nine high-specification ultra-deepwater drillships and two harsh environment semisubmersibles. Additionally, its fleet includes two high-specification ultra-deepwater drillships currently under construction at Samsung Heavy Industries with favorable shipyard financing terms. These two newbuilds are expected to be delivered in the third quarter of 2019 and the third quarter of 2020, respectively.

“The proposed acquisition of Ocean Rig provides us with a unique opportunity to continue enhancing our fleet of ultra-deepwater and harsh environment floaters, without compromising our liquidity or overall balance sheet flexibility,” said Transocean’s President and Chief Executive Officer, Jeremy Thigpen. “The combination of constructive and stable oil prices over the last several quarters, stream-lined offshore project costs, and undeniable reserve replacement challenges has driven a material increase in offshore contracting activity. As such, adding Ocean Rig’s premium assets to our industry-leading fleet provides us with an increased number of the modern and highly efficient ultra-deepwater drillships preferred by our customers, and better positions us to capitalize on what, we believe, is an imminent recovery in the ultra-deepwater market.”

Thigpen continued, “This combination with Ocean Rig further strengthens our relationships with strategic customers, while expanding our presence in the key markets of Brazil, West Africa and Norway. It also enables us to reduce our cost per active rig, as we believe that we can efficiently merge the Ocean Rig operations into our existing structure with limited incremental shore-based expense. Further, we are confident that we can realize meaningful synergies through our OEM agreements, our overall approach to maintenance and our fleet-wide insurance coverage, among other opportunities.”

Thigpen concluded, “Including the five rigs under construction, and considering the two additional rigs that we have recently decided to recycle, Transocean’s pro forma fleet will be comprised of 57 floaters, including many of the most technically capable ultra-deepwater floaters, and harsh environment semisubmersibles in the industry. With this unparalleled fleet, the offshore drilling industry’s largest and most profitable backlog totaling $12.5 billion, and approximately $3.7 billion in liquidity, we are well-equipped for the market recovery.”

Pankaj Khanna, President and Chief Executive Officer of Ocean Rig UDW Inc. commented: "This strategic combination of Ocean Rig and Transocean creates a world-class fleet perfectly positioned for the market recovery while reducing fragmentation that currently exists in offshore drilling. By adding our high-specification floaters to Transocean's industry-leading fleet, the combined company will have the offshore industry’s largest and most technically capable fleet of ultra-deepwater and harsh environment floaters. Upon consummation, this transaction will be of significant benefit to the stakeholders of both companies."

No changes to Transocean’s board of directors, executive management team, or corporate structure are anticipated as a result of the acquisition. The Company will remain headquartered in Steinhausen, Switzerland, with significant operating presence in Houston, Texas, Aberdeen, Scotland and Stavanger, Norway.

The transaction, which is expected to be completed during the first quarter of 2019, is subject to the approval of both Transocean and Ocean Rig shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals. The merger is not subject to any financing condition.

Also, consistent with the Company’s strategy of recycling less competitive rigs, Transocean will retire two of its floaters, the ultra-deepwater drillship C.R. Luigs and the midwater floater Songa Delta. The rigs will be classified as held for sale and will be recycled in an environmentally responsible manner. Both floaters are currently stacked. Transocean anticipates re-ranking the combined fleet, which may result in additional rigs being recycled.

(1) Per Transocean’s internal rig ranking model


Citi is acting as exclusive financial advisor to Transocean, and King & Spalding LLP is acting as legal advisor to Transocean with respect to U.S. law.

Credit Suisse Securities (USA) LLC is acting as financial advisor to Ocean Rig. Seward & Kissel LLP is acting as legal advisor to Ocean Rig with respect to U.S. law.

Conference Call Information

Transocean will conduct a teleconference call to discuss this transaction at 8:30 a.m. EDT, 2:30 p.m. CEST, on Tuesday, September 4, 2018. To participate, dial +1 323-794-2597 and refer to confirmation code 2404736 approximately five to 10 minutes prior to the scheduled start time of the call.

The teleconference will be simulcast in a listen-only mode over the internet and can be accessed at:, by selecting Investors, News, and Webcasts. Supplemental materials that may be referenced during the teleconference will be posted to Transocean’s website and can be found on the Investor Relations home page.

A replay of the conference call will be available after 11:30am EDT, 5:30 p.m. CEST, on September 4, 2018. The replay, which will be archived for approximately 30 days, can be accessed at +1 719-457-0820 passcode 2404736 and PIN 1152. The replay will also be available on the company’s website.

About Transocean

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services, and believes that it operates one of the most versatile offshore drilling fleets in the world.

Transocean owns or has partial ownership interests in, and operates a fleet of 41 mobile offshore drilling units consisting of 23 ultra-deepwater floaters, 12 harsh environment floaters, two deepwater floaters and four midwater floaters. In addition, Transocean is constructing two ultra-deepwater drillships; and one harsh environment semisubmersible in which the company has a 33 percent interest. The company also operates one high-specification jackup that was under a drilling contract when the rig was sold, and the company will continue to operate the jackup until completion or novation of the drilling contract.

For more information about Transocean, please visit:

About Ocean Rig

Ocean Rig is an international offshore drilling contractor providing oilfield services for offshore oil and gas exploration, development and production drilling, and specializing in the ultra-deepwater and harsh environment segment of the offshore drilling industry.

Ocean Rig’s common stock is listed on the NASDAQ Global Select Market where it trades under the symbol “ORIG.”

For more information about Ocean Rig, please visit:


Analyst Contacts:

Bradley Alexander
+1 713-232-7515
Diane Vento
+1 713-232-8015

Media Contact:
Pam Easton
+1 713-232-7647

Ocean Rig
Media/Investor Contacts:
Nicolas Bornozis 
Capital Link, Inc. (New York) 
Tel. 212- 661-7566 

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