Offshore drillers Transocean, Seadrill discussing merger – Bloomberg

Seadrill (NYSE:SDRL) +10.2% post-market Wednesday following a Bloomberg report it is in ongoing discussions with larger offshore drilling contractor Transocean (NYSE:RIG) about a potential merger.

Merging with Seadrill (SDRL) would fit Transocean’s (RIG) strategy of growing its list of backlog work, utilizing some of the world’s most advanced rigs capable of drilling in water more than two miles deep, according to the report.

Once the world’s two biggest offshore drillers, both companies have lagged amid a protracted downturn in the industry that forced many contractors into bankruptcy; offshore drilling, particularly deepwater, is again booming due to steady oil prices and slower production growth from U.S. shale fields.

Transocean’s (RIG) stock price has slumped 35% so far this year, giving the company a market value of $3.6B, and Seadrill (SDRL) shares are down 26% YTD, giving it a market cap of $2.4B.