Offshore drilling contractors Noble Corporation and Maersk Drilling are making progress with regards to the completion of their proposed merger transaction, as the UK Competition and Markets Authority said Monday it might accept the two companies' proposed solution to alleviate competition concerns.
Namely, the CMA said in April it had found that the Noble Corp. and Maersk Drilling merger could increase operating costs for oil and gas producers in the UK North Sea, and that the deal raised competition concerns in the supply of jack-up rigs for offshore drilling in northwest Europe - the area comprising the UK, Denmark, and the Netherlands.
Maersk Drilling and Noble Corporation acknowledged they might need to sell certain offshore rigs in the North Sea to obtain antitrust clearance from the UK Competition and Markets Authority, and have submitted remedy proposals to the UK CMA to address competitions concerns identified by the CMA, which include the divestment of certain jack-up rigs to a suitable purchaser.
Noble Drilling and Maersk Drilling have proposed selling the rigs Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and Noble Lloyd Noble, including all related support and infrastructure that the buyer will need to run the remedy rigs as an effective standalone business. Relevant offshore and onshore staff are expected to transfer with the remedy rigs.
On this basis, Maersk Drilling and Noble Corporation said they would seek to reach an agreement with a potential purchaser regarding the sale of the remedy rigs under the remedy proposal. The UK CMA will need to consider the purchaser a suitable purchaser.
In a statement on Monday, the CMA said there were "reasonable grounds for believing that the undertakings offered by Noble Corporation and Maersk Drilling, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002."
The duration and outcome of the UK CMA review process remains uncertain. If the UK CMA accepts a Remedy Proposal, the closing of the transaction is expected to occur in mid-2022.
"[Noble Corp. and Maersk Drilling] believe that the financial and strategic rationale underpinning the transaction remains intact and compelling for all stakeholders irrespective of the divestment of the Remedy Rigs. The parties’ estimated annual run-rate cost synergies goal also remains unchanged. Further, the Parties do not intend to change the exchange ratio agreed between them for purposes of the transaction," the offshore drillers said in a joint statement.
The transaction has been unconditionally approved by the competition authorities in Brazil, Norway, and the Republic of Trinidad & Tobago.
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