A subsidiary of ADES Holding signed an agreement for a recommended offer to acquire Norway's Shelf Drilling in a deal valued at SAR1.42bn ($379mn), aiming to create a global drilling sector entity, Al-Eqtisadiah reported on August 5.

According to a statement published on the Saudi stock exchange, the offer from ADES International Cayman at NOK14 per Shelf Drilling share includes a 62% premium on the closing price on August 4 at the Oslo Stock Exchange.

The cash merger deal, which awaits approval from Norwegian company shareholders and relevant regulatory authorities, is subject to Cayman Islands law and will result in delisting all Shelf Drilling shares from the stock exchange.

The transaction will also involve calling in existing American preferred bonds and Norwegian bonds in Shelf Drilling with a total preliminary value of around $1.3mn.

The deal, expected to close in the fourth quarter of this year, will create a global shallow-water drilling entity with a fleet of 83 jack-up offshore drilling rigs and a backlog of SAR35.44bn as of June 30.

ADES said it expects to achieve savings worth between $40mn-50mn in annual operating costs, noting these would be gradual over the medium term, alongside costs associated with achieving those savings.

CEO Mohammed Farouk said: "Under the deal, we will add 33 jack-up rigs and a dedicated and experienced workforce, supporting our expansion into additional regions and enhancing our global presence."

ADES Holding announced on August 4 that net profits fell 5.2% to SAR191.7mn in the second quarter of this year despite revenue growth supported by activities in the offshore platforms sector in Egypt, Qatar, India and Southeast Asia.

The acquisition will strengthen ADES's position in the global offshore drilling market and expand its operational footprint across multiple regions.