The merger of Maersk Drilling and Noble Company designed to create a bigger firm higher suited to reply to the challenges in offshore drilling is dealing with attainable opposition from UK regulators. Regardless of what the businesses and trade see as a compelling case for consolidation, the UK Competitors and Markets Authority (CMA) is but to launch its section 1 resolution and the administration of the 2 corporations count on that they might want to divest of presumably a sixth of the mixed fleet to win approval.
“Whereas the CMA is but to take its section 1 resolution,” the businesses wrote in an replace to buyers on the merger that they, “count on that it will likely be essential to divest sure jackup rigs at present situated within the North Sea to acquire conditional antitrust clearance in section 1 from the CMA.” The CMA is predicted to launch its section 1 resolution on April 22.
Final November, Maersk Drilling and Noble introduced plans for a merger of equals that they stated would create a number one firm with the size, capabilities, and assets to handle the altering market. On the time of the announcement, the businesses reported that Maersk Drilling had a fleet of 19 offshore drilling rigs and focuses on harsh atmosphere and deepwater operations, whereas Noble Drilling at present had a fleet of 20 offshore drilling models, together with 12 drillships and semisubmersibles in addition to eight jackups.
In a presentation to buyers, the businesses highlighted that they’d have one of many youngest fleets with a excessive contract price and management in harsh environmental jackups and extremely deepwater. The plan referred to as for a fleet of 39 vessels with a mean age of 10 years.
Joint the 2 corporations have tentatively outlined what they’re calling the “Treatment Rigs,” figuring out the vessels that they count on to be required to divest to realize the UK approval. The listing contains the Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and a CJ-70 design drilling rig which, at this level, they consider is more likely to be the Mærsk Innovator, though it’s attainable the Noble Lloyd Noble may very well be required to attain section 1 clearance.
They reported that constructive discussions are persevering with between Noble, Maersk Drilling, and the UK CMA forward of the publishing of the section 1 resolution. Nonetheless, they’ve additionally began to look at completely different choices to divest the Treatment Rigs. They famous that the boards consider that the monetary and strategic rationale underpinning the merger stays intact and they don’t intend to alter the change ratio agreed between them for functions of the transaction.
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Although they count on that they are going to be required to divest the Treatment Rigs to realize CMA clearance, the announcement stated that the length and final result of the CMA evaluation course of stays unsure. They highlighted that they’ve obtained unconditional approval from the competitors authorities in Brazil, Norway, and the Republic of Trinidad & Tobago. Apart from the UK, additionally they nonetheless require pre-closing merger management clearances for Angola, which they count on will this month unconditionally approve the transaction.
Whereas ready for the choice from the CMA, they proceed to count on the closing of the merger will happen in mid-2022.