Transocean Plans to Purchase R&B; Falcon

Transocean Sedco Forex Inc., already the world’s biggest offshore oil-drilling contractor, said it agreed to buy R&B; Falcon Corp. in a $5.3-billion stock deal that will leave it towering over its rivals and make it the dominant deep-water driller. Under the agreement, R&B; Falcon stockholders will receive 0.5 share of a newly issued Transocean Sedco share for each R&B; Falcon share. Transocean will also assume $3 billion in R&B; Falcon debt. The combined company would have a market capitalization of about $16.5 billion, almost three times as much as its biggest competitors, and would rank only beneath diversified oil-field services giants Schlumberger Ltd. and Halliburton Co. as a contractor to the global oil and gas industry. The deal was valued at $5.8 billion when announced, based on Friday’s closing prices, but a decline in Transocean stock brought the value down to $5.3 billion. Transocean fell $4.19 to close at $53.50 on the New York Stock Exchange, while R&B; Falcon closed up $1 at $26.19, also on the Big Board.