Mega-Deal in the Oil Patch

Originally Published In the News 7/23/07

The world’s largest offshore driller just hit paydirt again. Today’s merger between Transocean, Inc (RIG-NYSE) and GlobalSanteFe (GSF-NYSE) will create a near $55 billion behemoth in the booming oil services industry. The unique structure of the transaction will allow for a dividend of sorts, as a portion of the purchase will be paid in cash to shareholders via a recapitalization. The market seems to like the deal. Both stocks involved are trading higher in the aftermath of the announcement, which is not always the case in M&A land. The transaction might ignite more dealmaking, or at least speculation, with Pride International (PDE-NYSE)and Ensco International (ESV-NYSE) likely targets according to some analysts. no positions

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