global santafe and transocean merger

Could this be what some of the excitement is about ??..... Rialto is now aligned to an oil services group capped at USD53 Billion...imo. SALTY


Transocean Grabs GlobalSantaFe

By TSC Staff
7/23/2007 10:50 AM EDT

Updated from 7:25 a.m. EDT with new stock prices.


Transocean (RIG - Cramer's Take - Stockpickr) and GlobalSantaFe (GSF - Cramer's Take - Stockpickr) agreed to merge, creating an oil driller with an enterprise value of $53 billion.
The Houston-based combined company will be known as Transocean and will be led by Transocean's current chief, Robert Long. GlobalSantaFe chief Jon Marshall will become president and operating chief.

Transocean shareholders will receive $33.03 in cash and 0.6996 shares of the combined company for each share of Transocean they own. GlobalSantaFe shareholders will receive $22.46 in cash and 0.4757 shares of the combined company for each share of GlobalSantaFe they own. The total number of shares outstanding of the combined company after the transaction will be approximately 318 million shares.

Transocean was trading up a little over 6% to $116.5 in recent trading. GlobalSantaFe, meanwhile, was also up around 6% to $79.2.

"GlobalSantaFe's outstanding rig fleet complements Transocean's, and the combined company will have a global fleet of 146 rigs," said Long. "This transaction will enhance our high-end floater fleet, including five newbuild ultra-deepwater units, while growing our position in the worldwide jackup market, especially in the Middle East, West Africa and the North Sea. In addition, we will be positioned to better offer the full scope of drilling services to customers in all geographical areas as we focus on incident-free, efficient operations and further developing our talented workforce. GlobalSantaFe has an outstanding management team, as well as operational and support staff, which when combined with Transocean's will produce a top-notch team."

The aggregate total cash paid to both companies' shareholders will be $15 billion, which will be funded through a bridge loan due one year after closing. Transocean has received a commitment letter from Goldman Sachs and Lehman Brothers providing for this financing. Transocean expects to refinance the bridge loan with a mix of bank loans and debt securities.