Noble to acquire Diamond Drilling in $1.6bn deal

New York-listed Noble Corporation announced on June 10 that it will acquire Diamond Drilling in a $1.59bn stock-plus-cash deal.

As part of the transaction, Diamond shareholders will receive 0.2316 shares of Noble, plus a cash consideration of $5.65/share for each Diamond share, 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. The Noble board of directors will be expanded to include one member from the Diamond board.

"Our position will be strengthened with the addition of four 7th generation drillships and one of the most high-spec harsh environment semisubmersible rigs in the world,” said Noble CEO Robert Eifler. “Additionally, Diamond's five conventional deepwater and midwater rigs have averaged above 85% utilisation over the last three years and currently have strong forward contract coverage.”

“Supported by Diamond's $2.1bn of backlog and $100bn of anticipated cost synergies, we expect the transaction to be immediately accretive to our free cash flow per share and contribute to accelerated growth in our return of capital to shareholders,” he added.

Diamond CEO Bernie Wolford commented that the deal provides shareholders with both immediate and long-term upside potential. “Noble's operational strength, service posture and proven integration capabilities make this a natural match for Diamond,” Wolford said.

Noble intends to fund the cash portion of the transaction through new debt financing, which it has secured via a $600mn bridge financing facility.

The deal is subject to various 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.

Post-deal, Noble will own and operate a fleet of 41 rigs, including 28 floaters and 13 jackups. Additionally, the combined company will have a backlog of approximately $6.5bn as of today.