Seadrill to Acquire Aquadrill in $958m All-Stock Deal

Seadrill to Acquire Aquadrill in $958m All-Stock Deal

On December 23, Seadrill Limited and Aquadrill LLC announced that they had signed a binding merger agreement that calls for Seadrill to buy Aquadrill in an all-stock deal.

At the time of the merger's planned mid-2023 closure, Seadrill shareholders will possess 62% of the company's outstanding common shares, while Aquadrill unitholders will hold the remaining 38%.

Based on Seadrill's 30-day volume-weighted average share price on the NYSE of $31.25 as of December 22, 2022, the acquisition values Aquadrill at an implied equity value of about $958 million.

According to Seadrill, the merger will create a market-leading offshore drilling company with a fleet of 12 floaters, including seven drillships of the seventh generation, three rigs for harsh environments, four jack-ups for benign environments, three tender-assisted rigs, and seven rigs operated through various strategic alliances.

The backlog for the combined company will be $2.8 billion.

The combination of Seadrill and Aquadrill offers a solid strategic case for all stakeholders.

Additionally, it develops a market-leading offshore drilling company with a cutting-edge fleet that meets the highest standards and a simplified cost structure. As a result, the business will be in an excellent position to capture at least US$70 million in annual run rate synergies.

Due to the company's improved credit and liquidity standing and ability to generate appealing cash flows, it will also be well-positioned for continued expansion.

Commenting on the transaction, Simon Johnson, Seadrill's President and Chief Executive Officer, said, "At Seadrill, we seek to deliver safe and effective operations as the bedrock for generating returns for our shareholders. Seadrill and Aquadrill have a long and rich strategic and operational management history.”

“Our shared heritage will promote efficient integration of the two companies. I look forward to welcoming the Aquadrill fleet back into the Seadrill family," Johnson said.

Steven Newman, Aquadrill's Chief Executive Officer, said, "We believe this combination will create the most value for our shareholders and will create an excellent platform for high-quality service delivery to our customers."

The company will continue to be known as Seadrill Limited and have its primary place of business in Hamilton, Bermuda. The positions of President and Chief Executive Officer and Chair of the Board of Directors, respectively, will remain in the hands of Julie Robertson and Simon Johnson.

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