Transocean Agrees to Buy Transocean Partners

Transocean Ltd.

and Transocean Partners LLC

revealed Monday that they have struck a deal whereby the former would buy all the outstanding units of the latter in a share-for-unit merger transaction. As a result, Transocean Partners would get 1.1427 shares of the company for every unit held. This represented 15 percent premium to the July 29 closing price. Transocean indicated that it would issue about 22.7 million shares in the merger and that the completion of the transaction is conditioned upon Transocean Partners' common unitholders approval. The two companies expect the transaction to close in the fourth quarter of 2016. After the transaction is completed, Transocean Partners would be 100 percent owned by Transocean. As a result, it would have indirectly purchased the 51 percent ownership stake in the Discoverer Inspiration, the Discoverer Clear Leader and the Development Driller III, which are owned by Transocean Partners currently. Also, Transocean Partners' common units would cease to be traded on the NYSE. Transocean's president and CEO, Jeremy Thigpen, commented, "We are excited about this merger, as it provides significant and immediate benefits to Transocean in the form of simplified administration and governance, tangible cost savings and improved liquidity. The contemplated all-equity transaction is entirely consistent with Transocean's current liquidity objectives." In the pre-market trading, RIG shed $0.4 or 0.36 percent to trade at $10.95 at the time of writing this. On Friday, RIGP closed at $10.92.