TGS-NOPEC Geophysical Company has agreed the acquisition of Spectrum, creating a leading provider of 2D and 3D seismic data.
The transaction is expected to be completed as a statutory merger pursuant to Norwegian corporate law between TGS and Spectrum.
The transaction is supported by the board of directors of each of the companies, as well as Spectrum shareholders.
Definitive merger documents are expected to be entered into during May, with closing of the transaction expected during the third quarter of 2019 following shareholder approvals in EGM and regulatory clearance, TGS explained.
“Spectrum has successfully built a strong position in key offshore basins, particularly in the South Atlantic. The transaction thus fits well with one of TGS’s key strategic goals of growing exposure to this region. Moreover, Spectrum’s library, and in particular the vast 2D coverage, further adds to TGS’s strategy within data analytics, where access to large amounts of data is a key success factor. TGS remains committed to maintain the existing dividend policy and emphasizes that the strong cash position, the combination of two free cash flow positive entities and significant cost synergies, will enable continued industry leading shareholder returns,” said Kristian Johansen, chief executive officer of TGS.
“The strategic combination of TGS and Spectrum will form a stronger and better company with a world class data library, people and opportunities. We look forward to joining forces with TGS. There are strong strategic benefits from combining the companies, and we believe we can enhance our growth as part of a larger combined company,” added Rune Eng, president & chief executive officer of Spectrum.
The completion of the transaction and the issuance of the consideration shares are expected to take place in the third quarter of 2019, subject to the conditions being fulfilled.