The world's biggest oil rig leasing company today unveiled an agreed cash and shares offer to buy a smaller rival in a deal that will create a $53 billion group.

Transocean, the biggest offshore oil and gas driller in the world, is to buy GlobalSantaFe that will see the combined group, to be called TransOcean, controlling 146 rigs between them.

Oil companies typically hire drillers such as Transocean to build rigs for them which they then lease. The cost of renting rigs has soared in the last few years because of a global shortage of oil and gas drillers, which take a long time to build.

The surging oil price has seen demand for rigs increase rapidly and triggered sharp rises in spending in the energy industry.

Shareholders from both companies will share a cash windfall of $15 billion between them, which will be released once a new holding company is created.

Under the terms of the deal, Transocean shareholders get $33.03 in cash and 0.6996 share of the combined company for each share of Transocean they own. GlobalSantaFe shareholders get $22.46 in cash and 0.4757 share of the combined company for each share of GlobalSantaFe they hold.

The combined group has an order book worth $33 billion and will be based in Houston. Robert Long, chief executive of Transocean, will continue in the role after the deal is completed, with Robert Rose, the chairman of GlobalSantaFe, chairing the combined group.

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