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ADES sweetens Shelf Drilling merger deal with enhanced cash offer

AnyFans 2025-09-19

By Melisa Cavcic

ADES International Holding, a subsidiary of ADES Holding Company, which is part of Saudi Arabia-headquartered ADES Group, has tightened its grip on 33 jack-up rig additions to its fleet by revising its cash merger offer to bring the UAE-based Shelf Drilling into its fold. As a result, more than half of the UAE firm’s shareholder base has endorsed the takeover bid.

Following the signing of a transaction agreement for the acquisition of all issued and outstanding shares of Shelf Drilling by way of cash merger with an equity value of approximately NOK 3.9 billion, or around $380 million, ADES has revised its cash consideration to NOK 18.50 ($1.88) per share.

The duo claims that this revised cash offer has received irrevocable pre-commitments, which represent 53.4% of votes in favor of the proposed merger compared to 15% pre-commitments received before the proposed merger announcement on August 5, 2025.

Aside from previous irrevocable commitments to vote in favor of the proposed merger from Castle Harlan, Perestroika, the firm’s CEO, CFO and board members that continue to apply, more have now come in by additional Shelf Drilling shareholders.

These include China Merchants, Anchorage Capital Group, and Magallanes Value Investors, which, combined with ADES’ 17.9% stake in the company, in total represent 53.4% of the outstanding shares.

Shelf Drilling’s board of directors has unanimously recommended the revised takeover bid. The UAE-based player will hold an extraordinary general meeting on October 6, 2025, to approve the amended merger offer.

The Saudi Arabian firm’s increased offer comes after discussions with its senior management and careful consideration of Shelf Drilling’s current trading, jack-up market fundamentals, as well as $10 million upwards revised cost synergies estimate to $50-60 million on an annual basis from previously announced $40-50 million.

While the impact on the overall enterprise value of the acquisition represents an increase of approximately 6%, all other terms of the proposed merger remain unchanged, alongside the transaction timetable, with closing expected to occur in Q4 2025.

ADES, which employs over 8,000 workers, has a fleet of 90 rigs across 13 countries, including 40 onshore drilling rigs, 48 jack-up offshore drilling rigs, one jack-up barge, and one mobile offshore production unit (MOPU).

This merger is expected to enable the firm to establish a strong global player in shallow-water drilling with a substantial fleet of 83 offshore jack-ups, encompassing 46 premium units, following the addition of 33 jack-ups and entry into new regions through the Shelf Drilling takeover.