Oilwell Varco will pay $23.20 in cash and 0.4498 shares for each share of Grant Prideco. That values Grant Prideco's shares at $58 apiece, a 22% premium to the last close.
The company forecasts the deal will add to earnings and cash flow. The company also expects it will save $40 million in costs next year. This transaction will not affect on Grant Prideco's pending sale of its tubular businesses to Vallourec SA.
Both companies expect the deal to be accretive to 2008 earnings, assuming full-year cost savings of $40 million.
Oilwell Varco shares fell to $75 in premarket trading from Friday's closing price of $77.37.
National Oilwell Varco Inc. and Grant Prideco Inc. will have a market capitalization of about $32 billion. Oilwell Varco shareholders will own 86 percent of the combined company and Grant Prideco shareholders will own 14 percent.
National Oilwell has had one of the best performing stocks in the sector this year. Its shares have been up more than 165% since January, and profits soaring.
Grant Prideco agreed in October to sell its Atlas Bradford Premium Threading & Services, TCA and Tube-Alloy units to Paris-based Vallourec $800 million.
The deal still requires approval by shareholders of Grant Prideco as well as regulatory approvals.
Putin's official spokesman Dmitry Peskov commented on remarks in the US media about failures in launching nuclear-capable missiles in Russia
More than 5.8 million people voted for Nicholas Maduro at the presidential election in Venezuela. This is more than a quarter of registered voters. Why did those people vote for the man, who, as Western media write, took Venezuela to the brink of collapse?
It has long been understood that the West has been trying to subject Russian borders to total control. We have not seen such activity even during the Cold War