National Oilwell Varco Growing Via Grant Prideco Buyout (NOV, GRP)

National Oilwell Varco, Inc. (NYSE:NOV) and Grant Prideco, Inc. (NYSE:GRP) have announced today that they have entered into a definitive merger agreement where National Oilwell Varco will acquire all of the outstanding shares of Grant Prideco. 

The total consideration will equate to $58.00 per share in cash and stock. Based on December 14, 2007 closing share prices for each company, the $58.00 per share consideration represents a premium of 22% for Grant Prideco holders.

The breakdown is being put at $23.20 in cash and 0.4498 shares of National Oilwell Varco per share of Grant Prideco.  National Oilwell Varco, Inc. will be the larger parent here as it will hold roughly 86% of the value of the new combined company.  Based on National Oilwell Varco’s closing price on Friday the combined company will have an equity market capitalization of approximately $32 Billion.

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NOV shares are down 3% at $74.99 pre-market and GRP shares are up 17% at $55.70 pre-market.

Jon C. Ogg
December 17, 2007