Offshore staff

HOUSTON --Transocean Inc. and GlobalSantaFe Corp. have agreed to merge. Both boards of directors have approved a definitive agreement. The combined company will be named Transocean Inc.

The transaction is expected to close by the end of 2007, pending shareholders' approval, regulatory clearance, and receipt of funds under committed financing.

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, according to the report. Transocean has received a commitment letter from Goldman, Sachs & Co. and Lehman Brothers Inc. providing for this financing. Transocean says it expects to refinance the bridge loan with a mix of bank loans and debt securities.

Following the merger, Robert E. Rose, currently GlobalSantaFe's chairman, will serve as Transocean's chairman of the Board of Directors, Robert L. Long will continue as Transocean's CEO, and Jon A. Marshall will assume the position of president and COO. Other senior management positions will be named later.

"GlobalSantaFe's outstanding rig fleet complements Transocean's, and the combined company will have a global fleet of 146 rigs," says 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."

"The $15-billion cash payment allows us to achieve a more appropriate capital structure and deliver immediate value to our combined shareholders," says Marshall. "The combined company will have a broader customer base, particularly with the increasingly important national oil companies, greater exposure to the growing deepwater business and increased, low-risk organic growth prospects from the combined deepwater newbuild program."

07/23/2007