National Oilwell merging with Varco International in $2.5 billion stock deal

National-Oilwell Inc. and Varco International Inc. agreed to merge in a $2.5 billion stock deal in which National-Oilwell shareholders will own 51% of the combined company and Varco shareholders 49%.

Aug. 16, 2004

By OGJ editors
HOUSTON, Aug. 16 -- National-Oilwell Inc. and Varco International Inc. agreed to merge in a $2.5 billion stock deal in which National-Oilwell shareholders will own 51% of the combined company and Varco shareholders 49%.

Each company's board already unanimously approved the merger agreement between the two Houston-based companies. The deal calls for Varco stockholders to receive 0.8363 shares of National-Oilwell common stock for each Varco share.

Upon closing, National-Oilwell will change its corporate name to National Oilwell Varco Inc. The transaction is expected to be tax free to Varco stockholders, and it is expected to be accretive to earnings and cash flow for both companies in 2005.

The transaction is subject to various conditions, including stockholder approval of both companies and customary regulatory approvals. Closing is expected within 6 months. National Oil-Well manufactures drilling equipment, and Varco is a service company.

National-Oilwell Chairman, Pres., and CEO Pete Miller will be president and CEO of the new company. Varco Chairman and CEO John Lauletta will be chairman of combined company. Varco Pres. and Chief Operating Officer Joe Winkler will be chief operating officer of the new company.