Noble (NE) M&A Announcement summary

Deal rationale and strategic fit

• The combination creates a leading offshore drilling contractor with a highly complementary fleet, expanded presence in deepwater markets, and enhanced customer diversity and service capabilities.

• The combined company will own 41 rigs, including 28 floaters and 13 jackups, with a robust $6.5 billion backlog and strong contracted cash flow visibility.

• Addition of four 7th generation drillships and a high-spec harsh environment semisubmersible strengthens the position in premium offshore assets.

• Strong cultural alignment and shared commitment to operational excellence, safety, and environmental stewardship are expected to support seamless integration.

• Both companies see the deal as timely, leveraging undervalued market positions and significant backlog for future growth.

Financial terms and conditions

• Diamond shareholders receive 0.2316 Noble shares and $5.65 in cash per Diamond share, totaling $600 million in cash and representing an 11.4% premium to June 7, 2024 closing prices.

• Transaction structure is 64% stock and 36% cash, with Noble shareholders owning 85.5% and Diamond shareholders 14.5% of the combined company.

• Pro forma combined debt will be about $1.8 billion, with net leverage just over 1x on a 2024 basis.

• Intention to keep Diamond's secured bonds outstanding in a separate silo, with a bridge commitment for the cash portion to be refinanced with unsecured bonds.

• Quarterly dividend to increase by 25%, from $0.40 to $0.50 per share, effective next quarter.

Synergies and expected cost savings

• Annual pre-tax cost synergies of $100 million are targeted, with 75% expected to be realized within the first year.

• Majority of synergies are cash-based, primarily from shore-based and supply chain efficiencies.

• Transaction is significantly and immediately accretive to free cash flow per share.