Transocean Ltd. (NYSE:RIG) entered into an agreement to acquire Songa Offshore SE (OB:SONG) from Perestroika As, Asia Research & Capital Management Ltd., York Capital Management and others for NOK 6.6 billion on August 13, 2017. The offer will be made for an offer price of NOK 47.5 per Songa Offshore share to be settled in shares, convertible bonds and cash. The consideration for each share in Songa Offshore consists of 0.35724 newly issued shares in Transocean and $2.99726 (NOK 23.9) principal amount of 0.5% Exchangeable Senior Bonds due 2023, which are exchangeable into shares in Transocean. Songa Offshore shareholders will receive consideration comprised of 50% Transocean Ltd. newly issued shares and 50% in convertible bonds exchangeable into new shares in Transocean Ltd. In addition, each Songa Offshore shareholder may elect to receive a portion of their consideration in cash up to NOK 0.125 million per Songa Offshore shareholder. Any Songa Offshore shareholder holding shares valued at less than NOK 0.125 million based on the offer price may choose to receive 100% of their consideration in cash.

In connection with, and conditional upon completion of, the offer, Transocean will also offer to the holders of bonds in SONG04 and SONG05 to exchange (i) each SONG04 bond for consideration convertible bonds, cash or a combination thereof in a total amount equal to 103.5% of the principal amount of such SONG04 bonds and (ii) each SONG05 Bond for consideration convertible bonds, cash or a combination thereof in a total amount equal to 101% of the principal amount of such SONG05 bonds, for both (i) and (ii) plus accrued unpaid interest on the bonds up to completion of such bond offer.

Subject to making the offer, Transocean will also exchange with Perestroika its $50 million (NOK 430 million) shareholder loan for consideration convertible bonds in a total amount equal to 100% of the principal amount of the loan (plus accrued unpaid interest). The aggregate offer price paid to each Songa Offshore shareholder participating in the offer shall be comprised, as near as possible, of 50% consideration shares and 50% consideration convertible bond, with any exercise by such shareholder of the cash election being deducted first from the aggregate number of consideration convertible bond issued to such shareholder and second to the aggregate number of consideration shares issued to such shareholder.

The largest shareholders of Songa Offshore, Perestroika AS and funds managed by Asia Research & Capital Management Ltd. and York Capital Management Global Advisors, LLC, have subject to the terms and conditions of the pre-acceptances, irrevocably agreed to tender all shares that they own. In addition, Transocean has received irrevocable undertakings from each of the following directors and management members to tender their shares into the offer once it has been commenced: Arnaud Bobillier, Mike Mannering, Johan Mikkelsen, Mark Bessell, Bjørnar Iversen and Jan Rune Steinsland. Under the pre-acceptances the pre-accepting shareholders also agreed to receive all consideration through consideration shares and consideration convertible bond. Perestroika AS will through the offer become Transocean's largest shareholder, with a holding of shares and rights to shares equal to approximately 12% of the combined entity on a fully diluted basis. Perestroika has accepted a 12-month lock-up on the consideration shares to be received by it.

As part of the combination, it has been agreed that the Transocean Board will nominate Frederik W. Mohn, chairman of Songa Offshore, to serve as Director on the Transocean Board. The completion of the transaction is subject to customary conditions, including without limitation Transocean receiving acceptances for a minimum of 90% of the voting shares of Songa Offshore on a fully diluted basis, any governmental, regulatory or other official approval, completion of due diligence of Songa Offshore without material findings, Transocean extraordinary general meeting approval, New York Stock Exchange shall have approved the consideration shares and the shares issuable upon conversion of the consideration bonds for listing on such exchange and effectiveness of registration statements on Form S-4. The offer is not subject to any financing conditions. The offer was recommended by the Songa Offshore Board of Directors. As on January 9, 2018, the shareholders of Transocean approved the deal. As of January 16, 2018, the shareholders of Transocean Ltd. approved all the proposals related to the acquisition of Songa Offshore SE.

The Oslo Stock Exchange, in its capacity as the Norwegian take-over supervisory authority, has approved the offer set out in the offer document. As of October 3, 2017, the confirmatory due diligence review has been completed. Transocean has obtained pre-acceptances for approximately 76.5% of the shares in Songa Offshore on a fully diluted basis. The Financial Supervisory Authority of Norway has approved the combined offer document and prospectus dated December 20, 2017 prepared in connection with the offer. The offer period for the offer will commence December 21, 2017, and expire on January 23, 2018. The voluntary exchange offer expired on January 23, 2018, with a total of 175.72 million Songa Offshore shares representing approximately 91.5% of the total shares in Songa Offshore on a fully diluted basis having accepted the offer. Accordingly, the condition for a minimum acceptance of at least 90% of the shares on a fully diluted basis has been met. The offer is now unconditional. Upon settlement of the offer, Transocean will hold more than 90% of the shares in Songa Offshore and, therefore, Transocean intends to promptly initiate a compulsory acquisition of the remaining outstanding shares of Songa Offshore. The Transocean Board appointed a transaction committee consisting of Vanessa C.L. Chang and Frederico F. Curado, Edward R. Muller, Tan Ek Kia and Glyn A. Barker to determine the form, terms and conditions of the transaction. The transaction is expected to close during the fourth quarter of 2017. As on December 21, 2017, subject to satisfaction or waiver of the closing conditions, Transocean expects to close the transaction on or around January 30, 2018. The transaction is expected to be immediately accretive to Transocean's earnings.

Clarksons Platou Securities AS acted as financial advisor and received a fee of $5.5 million (NOK 43.8 million), Keith M. Townsend and Martin Hunt of King & Spalding LLP, Per Anders Sæhle of Wikborg Rein & Co., Stelios Americanos & Co LLC, Ogier LLP and David Oser, Dieter Grünblatt, Rafael Zemp and Marie Jenny of Homburger AG acted as legal advisors to Transocean. ABG Sundal Collier and Pareto Securities AS acted as financial advisors, Bjørnar Iversen and Jan Rune Steinsland of Schjodt and Cleary Gottlieb Steen & Hamilton LLP acted as legal advisors and PricewaterhouseCoopers Ltd. acted as accountant to Songa Offshore. Pareto Securities AS received a fee of $5.7 million (NOK 45.4 million). Computershare Trust Company, NA acted as the transfer agent and Ernst & Young acted as accountant to Transocean. ABG Sundal received a fee of $0.9 million (NOK 7.1 million).