Photo: Noble Tom Madden drillship; Source: Noble Corp.

UK competition regulator investigating Noble-Maersk Drilling merger

The UK’s competition regulator is looking into the proposed merger between two offshore drilling giants, Noble Corporation and Maersk Drilling.

The Competition and Markets Authority (CMA) revealed on Thursday it was investigating the anticipated acquisition of Maersk Drilling by Noble Corporation.

The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.

To assist it with this assessment, the CMA invites comments on the transaction from any interested party, with a deadline until 10 March 2022.

The deadline by when the decision whether to refer the merger for a Phase 2 investigation will be announced is set for 22 April 2022. However, the CMA noted that it cannot guarantee that the decision will be announced on or before this current deadline, as the deadline of a given case may change during the merger assessment process due to different reasons.

To remind, Denmark’s Maersk Drilling entered into a definitive agreement to combine with its U.S. rival Noble Corporation in a primarily all-stock transaction in November 2021. If approved, the merger is expected to create a combined company with a fleet of 20 floaters and 19 jack-up rigs.

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However, the two companies first have to secure approval from Noble shareholders as well as regulatory and other approvals. It is worth reminding here that, right after the merger was announced, some of Noble’s shareholders voiced concerns over the proposed deal despite “appealing optics”.

When it comes to regulatory approvals, the two rig owners have already secured it from the Norwegian Competition Authority (NCA), which did not raise any objections to it.

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After the merger, the combined company will be named Noble Corporation and its shares will be listed on the New York Stock Exchange and Nasdaq Copenhagen. It will be headquartered in Houston, Texas, and will maintain a significant operating presence in Stavanger, Norway, to retain proximity to customers and support operations in the Norwegian sector and the broader North Sea, and to ensure continued access to talent.

As reported earlier this month, Noble expects significant sequential growth in the upcoming two quarters with a continued upward trajectory in activity levels and day rates.