Veritas DGC, Norway’s PGS Agree to Merge

Petroleum Geo-Services and Veritas DGC Inc. said they agreed to merge in a stock-for-stock deal valued at more than $770 million that would create one of the largest geophysical services firms in the world.

Under the terms of the deal, billed as a merger of equals, Houston-based Veritas and Norway’s PGS would become wholly owned subsidiaries of a new holding company that hasn’t yet been named. The new company would be based in Houston.

PGS shareholders would get 0.47 share in the new company for each PGS share they own, giving them a value of $7.54 a share. Veritas shareholders would exchange each share they own for one share of the new firm.

Cost savings from combining operations, including an undisclosed number of job cuts, are expected to total $35 million annually.

Veritas supplies seismic data to oil and gas companies, mapping land and sea. That information, in turn, is used by companies to find possible locations for drilling exploratory wells.

Veritas employs about 4,300 people. PGS employs 4,200 and offers similar services.

News of the proposed merger was released after markets closed. Shares of Veritas fell 20 cents to $16.05, and PGS’ American depositary receipts rose 16 cents to $5.46, both on the New York Stock Exchange.