Danish transport and logistics company, A.P. Moller-Maersk has begun the process of selling its energy assets as it transitions its focus to transportation. According to insiders, Houston-based drilling firm Rowan Cos. is currently in talks to acquire Maersk’s drilling business and its assets.
Talks are still in the preliminary stages and insiders have warned it could still easily fall apart. None the less, Maersk’s drilling business assets are estimated to be worth $4 billion. Primarily an offshore contract driller, Rowan has a market value of $1.4 billion. This sale has attracted attention from several other offshore drilling companies and potential buyers are waiting if talks degrade.
This sale would likely include all Maersk’s drilling assets, which includes 24 drilling rigs, 4 deep-water semi-submersibles, 15 high-end jack-up rigs, and 4 drill ships. Their drilling business generated a $743 million profit last year and employs roughly 3,200 people.
This is the third sale in the last two months for Maersk. In August, they sold their oil and gas unit to France’s Total SA for $7.45 billion, two thirds of which were paid through shares in the company. Then on September 20th Maersk sold its tanker units to APMH invest A/S, its holding company, for $1.17 billion.
These talks would gel with Rowans recent expansion plans. Last November they partnered with Saudi Aramco to create a new drilling company, called ARO Drilling, with the aim to own and operate rigs in Saudi Arabia. This joint venture currently includes three jackups from Rowan, and two from Aramco, although two more Rowan rigs are scheduled to be reassigned to ARO in 2018.
During an energy industry conference earlier this month, Rowan CEO Tom Burke stated that they would be considering acquisitions with an “industrial logic” and added that any potential corporate transactions “would ideally be strategic, accretive, credit enhancing and should not dilute asset quality.”
In response to these rumors, Rowan shares surged nearly 6% in late morning trading on Monday. So far both companies have refused to officially comment or verify talks.
Article written by Kevin Abbott.