Spectrum, TGS directors agree on merger plan

Directors of Norwegian seismic companies TGS-NOPEC and Spectrum have unanimously approved and decided upon a final merger agreement and merger plan under the terms announced earlier in May.

The Boards of Directors of TGS and Spectrum have entered into an agreement regarding a contemplated merger through which Spectrum is merged into a wholly owned subsidiary of TGS.

As consideration for the assets, rights, and obligations being transferred from Spectrum to TGS NewCo, the shareholders in Spectrum will receive consideration by a share capital
increase in TGS. The merger exchange ratio is determined to be that one share in Spectrum gives the right to 0.28 shares in TGS

Explaining the rationale for the transaction the two companies said: “The Boards of Directors’ opinion is that a combination of the Companies’ business will lead to greater value creation compared to the Companies operating as separate entities. The combined company will have a comprehensive 2D and 3D database and will be well positioned to accelerate investments in an improving market, and help accelerate TGS’ data analytics strategy.”

Related: Norwegian seismic players TGS, Spectrum set to merge (May 3, 2019)

Through the merger, TGS NewCo will acquire all assets, rights, and obligations of Spectrum. Following the completion of the merger, Spectrum will cease to exist as a company listed on Oslo Stock Exchange. TGS will continue to be listed on Oslo Stock Exchange after the merger

Employees unaffected

As for the employees and the potential effects the merger might have on them, the two companies said: “Spectrum has 13 employees. TGS NewCo has no employees. The merger will not have any implications for the employees in TGS who will continue their employment unchanged. For the employees with Spectrum, their employment relationships will be transferred to TGS NewCo in connection with the merger. The employees will keep the terms and conditions in their existing employment agreements.”

“The merger plan is now to be submitted to and registered by the Norwegian Register of Business Enterprises,” the two companies said in a stock exchange announcement on Tuesday.

Completion of the merger is subject to approval by extraordinary general meetings in Spectrum and TGS, expected to be held on or about June 21, 2019.

Read the full merger plan, as shared by the two companies here (PDF).

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