Transocean, Schlumberger Unit to Merge
Schlumberger Ltd. plans to spin off its Sedco Forex Offshore unit to shareholders, then merge it with Transocean Offshore Inc. in a $3.2-billion transaction that would create the world’s largest offshore drilling company.
Shares of the new company, to be called Transocean Sedco Forex, are valued at $29 each, for a total of about $6.1 billion. Schlumberger shareholders would own 52%. Schlumberger investors would get one share of the new company for every five shares of Schlumberger they own; Transocean shareholders would get one share of the new company for each share.
The new company will be based in Houston and have operations in all the world’s major offshore drilling regions.
Sedco Forex Offshore had sales of $1.1 billion last year. Houston-based Transocean had 1998 sales of $1.09 billion. The companies predicteventual annual savings of $25 million.
In New York Stock Exchange trading, Schlumberger closed up 50 cents at $64.81, and Transocean closed up 88 cents at $29.88.
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