Veritas and PGS agree to $3.5 billion merger
28 Nov 2001
Petroleum Geo-Services ASA and Veritas DGC Inc. have announced that their boards of directors have unanimously approved a definitive agreement to combine the two companies in a merger of equals.
According to a statement, the merger will create the second largest company in the geophysical services industry with an equity market capitalisation of approximately $1.0 billion and a total enterprise value of approximately $3.5 billion. The transaction is anticipated to be immediately accretive to the combined company's earnings and cash flow per share.
The new company will offer a full range of integrated marine and land geophysical services and floating production operations boasting an industry-leading portfolio that includes 400,000 square kilometres of modern 3D data; 21 marine seismic crews and 83,000 land seismic channels capable of fielding 25 to 30 high-tech 3D crews.
The companies reportedly expect to achieve annual pre-tax cost savings of at least $35 million. Savings are expected to come from the elimination of duplicative general and administrative and operating activities, improved operating efficiencies and the optimisation of research and development efforts.
Under the terms of the agreement, both Veritas and PGS will become wholly owned subsidiaries of a new holding company incorporated in the Cayman Islands.
