National Oilwell to buy rival Varco - August 22, 2004

Providing coverage of Alaska and northern Canada's oil and gas industryAugust 2004

Vol. 9, No. 34

Week of August 22, 2004

National Oilwell to buy rival Varco

The Associated Press

National-Oilwell, which makes equipment used in oil drilling, said it will acquire rival Varco International in an all-stock deal currently valued at about $2.52 billion.

On Aug. 13, National-Oilwell said the transaction is expected to be tax-free to Varco stockholders, and is expected to add to earnings and cash flow per share for stockholders of both Houston-based companies in 2005.

Varco stockholders will receive 0.84 common share of National-Oilwell for each Varco common share.

Based on National-Oilwell’s closing price Aug. 11, the transaction is valued at $25.80 a Varco common share, with the combined company having a market capitalization in excess of $5 billion.

National-Oilwell’s current stockholders will own about 51 percent of the combined company.

The combined entity will become National Oilwell Varco Inc.

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