UK Regulators Willing to Approve Maersk Drilling – Noble Merger 

Regulators in the UK indicated today that they would be willing to review and likely accept the merger of Maersk Drilling and Noble Corporation if the companies proceed with the proposed remedies to their concerns, which include the sale of several jack-up rigs. The companies will need to present a formalized sale agreement before they can receive approval.

Last month, the U.K.’s Competition and Markets Authority expressed concerns over the potential for reduced competition if the proposed merger of Maersk Drill and Noble proceeded. The companies agreed to a merger of equals in November 2021 saying that it would help them to respond to changing market conditions in the offshore drilling industry. The transaction, which was valued at $3.4 billion they said would provide the scale, capabilities, and resources needed to address the challenges in the market.

The CMA confirmed its concerns about the merger on April 22 saying that it believed it could result in reduced competition and increased operating costs for oil and gas producers. They were focusing primarily on the two businesses’ overlapping activities in the supply of jack-up rigs commonly used for offshore drilling by UK customers in the North Sea. Maersk Drilling and Noble had previously warned that they believed the UK regulators were likely to require the sale of assets in order to approve the transaction and that they were preparing responses. 

“The CMA considers that there are reasonable grounds for believing that the undertakings offered by Noble Corporation and Maersk Drilling, or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002,” the CMA said in a brief statement released today, May 9. However, to receive the approval, the companies need to submit an agreed sale agreement for the regulators to approve.

The companies reported that the remedy proposal they are pursuing comprises the divestment of the rigs Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and Noble Lloyd Noble, including all the related support and infrastructure that the purchaser will need to run the rigs as an effective standalone business. They said that relevant off-shore and on-shore staff are expected to be transferred as part of an agreement.

Once an agreement has been reached with a potential buyer, the CMA will review the proposal including determining if it is a suitable purchaser and if it addresses the concerns to maintain competition in the North Sea operations. 

Maersk Drilling and Noble said they were uncertain of a timeline for the next steps, but continued to expect to complete their transaction in mid-2022.