Transocean to buy Aker Drilling for $1.43B

NEW YORK — Offshore rig contractor Transocean Ltd. plans to buy Aker Drilling for $1.43 billion to strengthen its position in Norway.

Transocean said Monday that it will pay 26.50 kroner per share ($4.81) in cash for the company. This is a 62 percent premium to Aker's 30-day average price of 16.39 kroner ($2.97) per share. The deal also includes $800 million in debt.

Aker Drilling runs two semi-submersible rigs on long-term contract to Statoil and Det Norske in Norway. It is also set to receive two drill ships currently under construction in Korea in 2013. Transocean will pay about $900 million to complete the order for those two ships.

By acquiring Aker, Transocean will expand its fleet and market share at a peak time for the industry. Petroleum companies are in rush to find new sources of oil to supply an ever-growing world demand. World oil demand is expected to hit a record 89 million barrels per day this year. Forecasters say that demand will increase as China and other developing nations grow.

Transocean already is the world's largest contract driller, with a fleet of more than 130 rigs across the globe. The company could have expanded by ordering new rigs, but buying Aker allows it to get the equipment faster and cheaper, said Trey Stolz, an analyst for Iberia Capital Partners.

"You lose time" ordering new rigs, Stolz said. "This way, they have two rigs that are producing right now."

Stolz expects Transocean to charge oil companies more than a half million dollars per day to use the Aker rigs.

Transocean shares rose $1.73, or 3.1 percent, to $57.34 in afternoon trading.

The bid is not subject to any financing conditions and will be funded with existing cash and debt facilities, Transocean said.

Transocean, based in Switzerland, expects the acquisition to add to earnings immediately. Aker's board has unanimously recommended shareholders accept the offer. The company said subsidiary Aker Capital AS and other shareholders that make up 60.5 percent of the outstanding stock have agreed to sell their shares to Transocean.