Noble and Maersk Drilling provide an update on the merger control process

Noble Corporation (NYSE: NE) (“Noble”) and The Drilling Company of 1972 A/S (CSE: DRLCO) (“Maersk Drilling”, and together with Noble, the “Parties”) today provided an update on the ongoing merger control process for the business combination announced on 10 November 2021 (the “Transaction”).

On 22 April 2022, the UK Competition and Markets Authority (“UK CMA”) announced its Phase 1 decision, pursuant to which it concluded that the Transaction gives rise to a realistic prospect of a substantial lessening of competition in relation to the supply of jack-up rigs in North West Europe (excluding Norway) (“NW Europe”) and that a remedy to address such effect would be required to avoid a reference to a Phase 2 review.

On 29 April 2022, the Parties submitted remedy proposals to the UK CMA (the “Remedy Proposals”, and individually a “Remedy Proposal”) to address such effect identified in the UK CMA’s decision of 22 April 2022. Each of the Remedy Proposals was designed to replicate the competitive constraint provided by Noble in respect of jack-up rigs in NW Europe by the divestment of certain jack-up rigs to a suitable purchaser.

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On 9 May 2022, the UK CMA published its decision that there are reasonable grounds for believing that one of these Remedy Proposals might be accepted by the UK CMA. This one Remedy Proposal comprises the divestment of the rigs Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and Noble Lloyd Noble (the “Remedy Rigs”) including all of the related support and infrastructure that the purchaser will need to run the Remedy Rigs as an effective standalone business. Relevant off-shore and on-shore staff are expected to transfer with the Remedy Rigs.

On this basis, the Parties will seek to reach an agreement with a potential purchaser regarding the sale of the Remedy Rigs under the Remedy Proposal. The UK CMA will need to consider the purchaser a suitable purchaser.

Following its decision that it might accept this Remedy Proposal, the UK CMA will review the terms of the Remedy Proposal and the suitability of potential purchasers. This will include seeking third party comment. The duration and outcome of the UK CMA review process remains uncertain. If a Remedy Proposal is accepted by the UK CMA, closing of the Transaction is expected to occur in mid-2022.

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.

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