Offshore drilling contractor, Noble Corporation (NYSE:NE, CSE: NOBLE) has struck a deal to take over Diamond Offshore Drilling for around $1.6 billion in shares and cash.
Diamond shareholders will receive 0.2316 Noble shares and cash of $5.65 per share for each share they own stock, which would combine to give Diamond shareholders a 14.5% stake in the enlarged Noble.
The price represents an 11.4% premium to closing stock prices on Friday.
Noble CEO Robert Eifler said the acquisition "enables Noble to continue our journey of delivering superior innovation and value to a broad range of the leading offshore operators across the world".
Adding Diamond will bring four 'seventh generation' drillships, a high-spec semisubmersible rig, as well as a $2.1 billion backlog and an anticipated $100 million of cost synergies, he said.
"We expect the transaction to be immediately accretive to our free cash flow per share and contribute to accelerated growth in our return of capital to shareholders."
Noble also announced a 25% increase in its quarterly dividend to $0.50 per share, starting with the dividend which is to be paid in the third quarter of 2024.