UK oil company Ensco is buying its US rival Pride International for around £4.5 billion in a deal that will create the world's second largest offshore oil and gas driller.
The combined group will be valued at $16 billion (approximately £9.9 billion) and have a total of 74 rigs, including 21 ultra-deepwater and deepwater platforms. It will have operations and drilling contracts in over 25 countries across six continents, with regions including south-east Asia, the North Sea, the Mediterranean, the Gulf of Mexico, Mexico, the Middle East and Australia, as well as Brazil and West Africa.
The new company is likely to realise cost synergies of $50 billion a year from 2012, Ensco said.
Commenting on the deal, Ensco’s chairman, president and CEO Dan Rabun said: “The combination is an ideal strategic fit, as our rig types, markets, customers and expertise complement each other with minimal overlap. Pride has gained valuable expertise building and operating ultra-deepwater semisubmersibles and drillships and has strong relationships with leading customers in Brazil and West Africa, two of the fastest-growing deepwater markets in the world.”
He went on to say: “Together, we will form an even stronger company that is ideally positioned to capitalize on growth opportunities within our industry.”
Pride’s president and CEO Louis Raspino added: “The combination of Pride and Ensco creates an offshore contract driller with many of the attributes needed to ensure long-term success in our business. I have always been an advocate of scale, believing that a company with critical mass is afforded numerous benefits, including operational efficiencies, marketing advantages and the ability to attract and retain talented individuals that will help to secure a strong future for our company.”
The deal is subject to regulatory approval but could be completed during the second quarter of this year.
The combined company will retain the name Ensco and will remain domiciled in the UK, with nearly all of its senior executive officers located in London.
