The companies said the deal would solidify National Oilwell's position as a leading supplier of comprehensive systems and components used in offshore oil and gas drilling and production.

Under the terms of the agreement, National Oilwell will make a cash tender offer in thirty days to acquire all of the outstanding shares in Hydralift.

National Oilwell will offer about US$7.33 for each share of Hydralift, which had on 10 October a closing price on the Oslo Bors of US$4.57. The total value of the transaction, including the assumption of debt, is approximately US$300 million.

Bjarne Skeie, chairman of the board of Hydralift, and Birger Skeie, chief executive officer, have agreed to continue in their current positions after the combination.

"This combination is an exceptional fit and will create the leading global supplier of offshore drilling equipment, offshore production equipment and floating production systems," National Oilwell's chairman Pete Miller said.

"We believe Hydralift's product range will open new growing market segments to National Oilwell and benefit our customers' needs for more technical, fully integrated drilling systems. Additionally we are extremely excited about the experience, reputation and leadership Mjarne and Birger will bring to our international management team."

The deal is subject to various conditions including the acceptance of the tender offer by shareholders owning more than 90% of the outstanding shares.

A group of Hydralift's key shareholders, including Bjarne Skeie and the board of directors, who collectively own about 22.8% of Hydralift's shares, have granted six month options to National Oilwell to purchase their shares of Hydralift at a price equal to the tender offer price.