Noble Corp. (NYSE: NE), the world’s biggest offshore oil-rig contractor by market value, has agreed to buy its smaller rival Diamond Offshore Drilling Inc. (NYSE: DO) in a deal valued at $1.6 billion. 

The deal comes as offshore drilling is poised to boom in the years ahead as growth in U.S. shale basins ebbs. Noble, based in Sugar Land, Texas, will fund the cash portion of the deal through a $600 million bridge loan.

Morgan Stanley was Noble’s lead financial adviser and Paul, Weiss, Rifkind, Wharton & Garrison LLP was its legal adviser. Guggenheim Securities and TPH were financial advisers to Diamond, while Kirkland & Ellis LLP was its legal adviser.