Global Marine and Santa Fe International announce $6 billion merger
4 Sep 2001
Global Marine and Santa Fe International Corporation have announced that they have entered into a definitive agreement to merge in a stock-for-stock transaction that will create the world's second largest offshore drilling contractor.
The new company will be named GlobalSantaFe Corporation. Based on Santa Fe's closing stock price on Friday, August 31, GlobalSantaFe would have a market value of approximately $6 billion.
Under the terms of the transaction, Global Marine stockholders will receive a fixed ratio of 0.665 shares of newly issued GlobalSantaFe stock for each share of Global Marine and will own approximately 50.6% of the combined company.
Gains on the transaction will be taxable to Global Marine shareholders. The transaction will not be taxable to Santa Fe shareholders, who will retain their existing shares and will own approximately 49.4% of the combined company. GlobalSantaFe will have approximately 233 million shares outstanding.
The transaction is expected to be modestly accretive to GlobalSantaFe's earnings and substantially accretive to GlobalSantaFe's cash flow in 2002.
The transaction is subject to the approval of each company's shareholders and customary regulatory approvals, including completion of the Hart-Scott-Rodino antitrust process. The transaction is expected to close by year-end 2001.
According to a statement from Global Marine, by combining complementary resources, GlobalSantaFe will have the operational scale and market coverage to deliver superior service to the world's leading oil and gas companies.
The new company will operate over 100 rigs in the world's key drilling markets, with its own fleet of 59 offshore and 31 land drilling rigs and 13 rigs operated for others. In addition, the new company will be the world's leading provider of drilling management services, including turnkey and project management.
