Noble and Maersk merger hits a potential speed bump in the UK

Noble Corporation and Maersk Drilling expect they will need to divest certain jack-up drilling rigs located in the North Sea to obtain conditional anti-trust clearance for their planned merger from the UK authorities.

At this point in time, the merger has been unconditionally approved by the competition authorities in Brazil, Norway, and Trinidad & Tobago, the two companies said.

Angola and the UK are the only outstanding pre-closing clearances required, and the Angolan authority is expected to unconditionally approve the deal this month.

The merger control process for obtaining clearance in the UK remains ongoing with constructive discussions continuing between Noble, Maersk Drilling, and the UK Competition and Markets Authority (CMA) ahead of the CMA expectedly publishing its phase one decision on 22 April 2022.

The drilling companies said they expect it will be necessary to divest certain jack-up rigs currently in the North Sea (referred to as the remedy rigs) to obtain conditional UK anti-trust clearance in phase one from the CMA.

The parties currently expect these rigs to be the Noble Hans Desul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and a CJ-70 design drilling rig which, at this point, the parties believe is likely to be the Maersk Innovator, although it is possible the Noble Lloyd Noble could be required to achieve phase one clearance.

On this basis, the parties have started to examine different options to divest the rigs.

In a joint statement, Noble and Maersk said: ”The parties believe that the financial and strategic rationale underpinning the transaction remains intact and compelling for all stakeholders irrespective of the divestment of the remedy rigs.

“The parties’ estimated annual run-rate cost synergies goal also remains unchanged.

“Further, the parties do not intend to change the exchange ratio agreed between them for purposes of the transaction.”

"Though the parties expect that they will be required to divest the remedy rigs in order to gain CMA clearance, the duration and outcome of the CMA review process remains uncertain.

“If the parties are able to obtain a conditional phase one anti-trust clearance from the CMA, they expect closing of the transaction will occur in mid-2022.”

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