Home News TGS and PGS Merger Creates a Dynamic Energy Data Provider

TGS and PGS Merger Creates a Dynamic Energy Data Provider

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Norwegian seismic and geophysical data company TGS announced on Monday its plans to merge with peer company PGS. This strategic move aims to establish a diversified full-service energy data provider, with the combined company valued at approximately $2.62 billion.

The Deal

As part of the deal, shareholders of PGS will receive 0.06829 ordinary shares in TGS for each PGS share they hold. This valuation pegs each PGS share at NOK10.073, representing a 21% premium to Friday’s closing price. The agreement values PGS at 9.32 billion Norwegian kroner ($867.2 million).

Following the completion of the merger, TGS shareholders will hold approximately two-thirds of the combined company, while PGS shareholders will hold one-third.

A Geophysical Powerhouse

TGS Chairman Chris Finlayson expressed confidence in the merger, stating that it will bring together the unique capabilities of both companies to create a geophysical powerhouse. This strategic move reflects TGS’ evolution from a pure multi-client seismic company to the leading provider of geophysical data to both the oil and gas industries and new energy sectors.

Unlocking Synergies and Efficiency

The merger is expected to address supply chain risks while generating significant cost synergies and operational efficiencies. It is estimated that over $50 million in annual cost synergies will be realized, resulting in a fully diluted market capitalization of around $2.62 billion for the combined company.

The Path Ahead

The boards of both TGS and PGS fully support the transaction, with TGS Chief Executive Kristian Johansen and Chief Financial Officer Sven Borre Larsen set to continue their roles in the merged entity. Definitive merger agreements are planned for October 2023, and the transaction is anticipated to close in the first half of 2024, subject to confirmatory due diligence, finalizing a merger plan, and meeting customary closing conditions. Approval from extraordinary general meetings at both TGS and PGS is also required.

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