Offshore Drillers Move to Merge in $7 Billion Deal

Offshore drilling in the U.S. got a lot of media attention following the catastrophic collapse in the Gulf of Mexico of an oil rig owned by British Petroleum. Ensco, which specializes in offshore drilling, announced on Monday that it would acquire Pride International in a deal that will bring further consolidation to the industry.

The merger, valued at $7.3 billion in cash and stock, would create the second-largest offshore driller in the entire world; if approved, the new company would have 74 rigs throughout the globe, with 21 ultra-deepwater and deepwater rigs to boot.

Per terms of the proposed deal, Pride International stockholders will receive shares of Ensco and $15.60 in cash for each of their shares; in total, Pride shareholders will be awarded $2.8 billion in cash if the deal goes through. The combined company will keep the Ensco name, The New York Times reports, and its headquarters will stay in London, England.

Since the BP rig exploded in the Gulf back in 2010, policymakers in the U.S. have moved to more actively regulate the offshore drilling industry, introducing legislation that many hope would prevent such a large-scale catastrophe from happening again. The proposed merger between the two companies was first reported by The Wall Street Journal in November.