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Transocean and GlobalSantaFe Announce Merger

Jul. 23, 2007 7:53 AM ETOIH, GSF, RIG
Steven Towns profile picture
Steven Towns

The boards of directors of Transocean Inc. and GlobalSantaFe Corp. have unanimously approved a definitive agreement for a merger of equals. The combined entity -- to be known as Transocean Inc. and continue trading under symbol "RIG" on the NYSE -- has an enterprise value of around $53 billion, based on Friday's closing share prices. Transocean shareholders will receive $33.03 in cash and 0.6996 shares of the combined company for each share of Transocean they own. GlobalSantaFe shareholders will receive $22.46 in cash and 0.4757 shares of the combined company. The total number of shares outstanding post-merger will be around 318 million. Shareholders of both firms will receive an aggregate payment of $15b in cash financed by a bridge loan. Cost reduction opportunities totaling $100m - $150m are targeted by 2010. "GlobalSantaFe's outstanding rig fleet complements Transocean's ... we will be positioned to better offer the full scope of drilling services to customers in all geographical areas," said Robert L. Long who will remain Transocean's CEO. Goldman Sachs advised Transocean and Lehman Brothers advised GlobalSantaFe. GSF 23 07 2007 Chart RIG 23 07 2007 Chart

Sources: Press release, MarketWatch
Commentary: Oil Prices and Gasoline Prices: A Noteworthy DivergenceDeep Sea Drilling: A Risk Worth Taking?Transocean: A Case Study of Risk vs. Reward
Stocks/ETFs to watch: GlobalSantaFe Corp. (GSF), Transocean Inc. (RIG). Competitors: Noble Corp. (NE), Diamond Offshore Drilling Inc. (DO). ETFs: Oil Services HOLDRs (OIH), PowerShares Dynamic Oil & Gas Services (PXJ), iShares Dow Jones US Oil Equipment Index (IEZ)

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This article was written by

Steven Towns profile picture
Steven is the founder of Uguisu Research, a provider of bespoke Japanese equity research. He is also the author of 'Investing in Japan: There is no stock market as undervalued and as misunderstood' (2012). 'Investing in Japan' fills the void of information about Japanese stocks, providing a comprehensive overview of the market, challenging conventional wisdom of Japan being on its last leg, and providing insightful discussion of many key aspects to investing in Japan, including the strategies of investment funds, leading hedge funds, idiosyncrasies of the market, returns on equity, shareholder rights, and more. Link to Investing in Japan on Amazon: http://amzn.to/AENfeH

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