Offshore services provider Tidewater Inc. said on July 16 it would buy smaller rival GulfMark Offshore Inc. in an all-stock deal to create a $1.25 billion company, the latest in a consolidation spurred by the recovery in oil prices.

The deal allows U.S-based Tidewater to expand its presence in the U.K. North Sea basin, where a 30% jump in oil prices since the end of 2016 has boosted rates for operators.

Offshore services providers, which help drillers transport equipment, crew and also prepare the rig, had been particularly hard hit by the slump in oil prices that began in 2014. But with prices stabilizing above $70 per barrel, oil producers are returning to offshore blocks.

London-based offshore rig contractor Ensco Plc last year bought smaller rival Atwood Oceanics in a deal valued at $839 million, while world's biggest drilling rig operator, Transocean Ltd, bought Norway’s Songa Offshore for $1.1 billion.

GulfMark shareholders will receive 1.100 shares of Tidewater common stock for each share held. Holders of GulfMark securities will get about $340 million, the companies said July 16. The newly created firm will have the largest fleet in the industry and will save Tidewater $30 million by the fourth quarter of 2019, the companies said.

Tidewater's shares gained 3.7% to $31.75 in early trading, while GulfMark was up 2.1%.

Offshore