Noble to acquire Diamond Offshore for $15.52 per share in stock plus cash deal

Noble (NE) and Diamond Offshore (DO) announced that they have entered into a definitive merger agreement under which Noble will acquire Diamond in a stock plus cash transaction. As part of the transaction, Diamond shareholders will receive 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond stock, representing an 11.4% premium to closing stock prices on June 7. Upon closing, Diamond shareholders will own approximately 14.5% of Noble’s outstanding shares. Noble expects to realize annual pre-tax cost synergies of $100M, with 75% expected to be realized within one year of closing. The transaction is significantly and immediately accretive to Noble’s free cash flow per share and will facilitate Noble’s ability to further augment our return of capital to shareholders. Under the terms of the merger agreement, Diamond shareholders will receive 0.2316 Noble shares and $5.65 per share in cash for each Diamond share. Following the close of the transaction, Diamond shareholders will own approximately 14.5% of Noble’s shares on a fully-diluted basis. The implied cash and stock consideration to be received by Diamond shareholders is $15.52 per share, representing a premium of 11.4% to Diamond’s closing share price on June 7. Noble intends to fund the cash portion of the transaction through new debt financing, which Noble has secured through a $600M committed bridge financing facility. At closing, the Noble board of directors will be expanded to include one member from the Diamond board. The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals and the approval of Diamond shareholders. The transaction is expected to close by the first quarter of 2025. The transaction has been unanimously approved by the board of each company. Giving effect to the acquisition, Noble will own and operate a fleet of 41 rigs including 28 floaters and 13 jackups. Additionally, backlog for the combined company would be approximately $6.5B. With this expanded fleet and contracted cash flow visibility, Noble will remain committed to maximizing value for customers, employees and shareholders by delivering safe and efficient operational results and maintaining a disciplined capital allocation approach that prioritizes returning the significant majority of free cash flow to shareholders.