U.K.-based driller Ensco PLC said Jan. 14 it will hike its exchange ratio for the merger with Houston-based driller Rowan Cos. PLC.
Ensco disclosed Rowan shareholders will receive 2.6 Ensco shares for each Rowan share, up 17.4%, from the agreed exchange ratio of 2.2 in October 2018. The combined company is estimated to have a value of $12 billion.
Ensco shareholders will own 57% of the combined firm, while Rowan shareholders will own 43%. In October 2018, Ensco signed an agreement for the acquisition of Rowan Companies for $2.5 billion.
Other terms and conditions of the transaction will remain. The new exchange ratio was approved by Ensco's entire board of directors.
The merger is expected to result in $150 million of annual synergies, which will create $1 billion in capital for shareholders.
The merged company will have $3.7 billion of total liquidity, $2.6 billion contracted revenue backlog and an enhanced credit profile that will allow it to better compete across market cycles.
The combined company will own a fleet of 82 rigs, including 28 floaters and 54 jack-ups.