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Transocean shareholders back acquisition of Songa Offshore

Jan. 19 (UPI) — Rig company Transocean said its shareholders approved of all of the proposals related to an August move to acquire rival Songa Offshore.

Transocean said an extraordinary meeting of shareholders concluded in Switzerland with overwhelming support for the takeover.

“With this acquisition, we add to our industry leading backlog, providing more visibility to future earnings and cash flows,” Transocean’s President and CEO Jeremy Thigpen said in a statement. “As importantly, we enhance our industry leading harsh environment fleet in the midst of a strengthening global harsh environment market.”

The deal tabled in August was based on a share price for Songa at $6.05 per share, about a 40 percent premium to the Aug. 14 close. The deal implies the value of Songa at about $1.1 billion.

Songa Offshore has four rigs in its portfolio that are designated for harsh environments. On top of its legacy fleet, Transocean has four drill ships designed for ultra-deep waters under construction and two of those are already under contract from Royal Dutch Shell for the next 10 years.

Last year, energy companies that provide services for the exploration and production side of the industry, like Transocean and Songa Offshore, tried to streamline operations as oil prices remained stuck at a level that were about half what they were three years ago. Drilling services company Baker Hughes is now a GE company and rival Schlumberger spent much of 2016 acquiring smaller players in the upstream sector.

Brent crude oil prices ended 2017 up about 20 percent and are now trading near four-year highs.

Songa had no comment on the support from Transocean shareholders. In August, its board called on its shareholders to accept the offer.

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