Prime Highlights
- Saudi Arabia’s ADES is to buy Norway’s Shelf Drilling in an all-cash $380m deal.
- The offer is 62% higher than Shelf Drilling’s last traded share price.
Key Fact
- The acquisition takes Shelf Drilling to approximately NOK 3.9 billion, or $380 million.
- The combined company will have 83 offshore jack-up drilling rigs worldwide.
Key Background
Saudi drilling behemoth ADES Holding Company has agreed to a binding purchase agreement for Norway’s Shelf Drilling in an all-cash deal worth approximately $380 million. Takeover offer of NOK 14 per share represents a 62% premium over Shelf Drilling’s August 4 closing price and a 56% premium over its one-month average. Shock move is part of ADES’s growth strategy to control the offshore shallow-water drilling market.
Shelf Drilling’s Board of Directors has also voted in favor of the deal in an overwhelming manner and urged shareholders to accept the offer. Important stakeholders, including executive team members and institutional investors who own around 15% stakes in the company, have already agreed to vote in favor of the deal. The deal is also pending shareholder and regulatory approval on September 16 in the form of a shareholder vote and is expected to close in Q4 2025.
After completion, Shelf Drilling will be de-listed from the Oslo Stock Exchange and will be the wholly owned subsidiary of ADES. The combined group will have control over a fleet of 83 offshore jack-up rigs out of which 46 are high-end rigs, providing ADES with a stronger operating presence in core markets like the Middle East, Southeast Asia, and Africa. The order backlog of the combined group is expected to be higher than $9.45 billion.
ADES expects a yearly cost synergies of $40–50 million due to exploitation of operational efficiencies and enhanced scale. Refinancing Shelf Drilling’s current debt, some $1.3 billion in total, also forms part of the deal. ADES CEO Mohamed Farouk quoted that the transaction “positions ADES as a global market leader,” while Shelf Drilling’s CEO Greg O’Brien quoted that the acquisition “brings immediate and compelling value to shareholders.”
