Offshore driller Ensco said on Monday it plans to buy smaller rival Rowan Cos. in an all-stock deal valued at $2.38 billion, as it looks to expand its fleet and benefit from a partnership with Saudi Aramco.
This is Ensco's second deal since OPEC-led efforts boosted oil prices in the second half of 2016. Ensco bought rival Atwood Oceanics in a similar deal last year.
Rowan shareholders will receive 2.215 Ensco shares for each share held. Following the close of the deal, Ensco shareholders will own 60.5 percent of the combined company.
The combined company, which will have an enterprise value of about $12 billion, will have a fleet consisting of 28 floating rigs and 54 jack-ups with drilling operations in the Gulf of Mexico, Brazil and West Africa, among others.
The company will benefit from Rowan's strategic joint venture with Saudi Aramco, Ensco CEO Carl Trowell said.
Rowan formed ARO Drilling with the state oil giant in 2016 to operate offshore drilling rigs in Saudi Arabia. The Ensco deal excludes Rowan's 50 percent interest in ARO Drilling.