TGS and PGS to merge and create a leading energy data company

OSLO, NORWAY: TGS ASA and PGS ASA, two of the largest providers of geophysical data for the energy industry, have announced that they have agreed to merge and form a new company with a strong portfolio of products and services.

The merger, which is expected to be completed by the first half of 2024, will be done through a share exchange, where PGS shareholders will receive 0.06829 TGS shares for each PGS share they own. The new company will be owned by TGS and PGS shareholders in a ratio of 2:1, based on the share capital of both companies as of 15 September 2023.

The boards of both companies have supported the merger, which they believe will create value for their clients and shareholders. The new company will be led by Kristian Johansen as CEO and Sven Børre Larsen as CFO, who currently hold the same positions in TGS.

The new company will offer a full range of geophysical data solutions, including multi-client data, streamer data acquisition, ocean bottom node data acquisition, imaging and new energy data. The merger will also help reduce supply chain risks and improve operational efficiency and cost savings.

The new company will have a market capitalization of about USD 2.6 billion and a net debt of USD 649 million, as of the second quarter of 2023. The new company plans to refinance PGS’ USD 450 million senior notes and term loans on the first call opportunity. The new company will also maintain a conservative balance sheet policy.

The merger will result in a premium for PGS shareholders, who will receive a price per share of NOK 10.073, based on TGS’ closing price of NOK 147.50 on 15 September 2023. This represents a premium of 20.7% to PGS’ closing price on the same date, and an exchange ratio premium of 22.4%, 40.8% and 41.6% based on the 30-day, 3-month and 6-month volume-weighted average prices (VWAP) as of 15 September 2023, respectively.

PGS shareholders will also receive compensation for any future TGS dividend payments up to the closing of the merger. The full merger plan is expected to be published in October 2023.

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