Swiss offshore driller Transocean LTD (NYSE:RIG) said Monday that it has resolved its proxy battle with billionaire investor Carl Icahn. Transocean LTD (NYSE:RIG) will pay $3 a share or $1.1 billion in dividends, and reduce the number of directors from fourteen to eleven. Icahn had been pressing for a $4 per share dividend for the past several months. The Icahn Enterprises LP (NASDAQ:IEP) chief disclosed his 5.6% stake in the company in January this year. He has wildly criticized Transocean LTD (NYSE:RIG) for its unsuccessful strategies and ill-advised mergers, reports Sakthi Prasad of Reuters

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Transocean to back Merksamer and Intrieri

Transocean LTD (NYSE:RIG) also committed to boost profits by $800 million through increased efficiency and cost-cutting. The Vernier, Switzerland-based rig contractor will back Samuel Merksamer and Vincent Intrieri to the board. Merksamer and Intrieri represent Icahn Enterprises LP (NASDAQ:IEP). While Intrieri will be new to the board, Merksamer has been a Transocean LTD (NYSE:RIG) board member since May, 2013. In return, Carl Icahn agreed to support the directors nominated by the board. As of June 30, Icahn is the third-largest shareholder of Transocean LTD (NYSE:RIG).

Transocean LTD (NYSE:RIG) halted its dividend payment in 2012 as it went through the legal processes related to the Deepwater Horizon oil spill in the Gulf of Mexico. The Gulf of Mexico disaster at the Barclays PLC (NYSE:BCS) (LON:BARC)-run rig took place in April 2010, and involved one of Transocean LTD (NYSE:RIG)’s rigs. In January, the company agreed to pay a $1.4 billion fine.

How Transocean will arrange funds

In recent months, Carl Icahn has pressed several companies including Dell Inc. (NASDAQ:DELL) and Apple Inc. (NASDAQ:AAPL) for shareholder-friendly changes. However, Transocean shareholders rejected his $4 a share dividend plan to favor a small dividend payout offered by the company earlier this year.

Transocean LTD (NYSE:RIG) said in a statement that the dividend will come from additional paid-in capital. The company will also save at least $200 million through 2014 from a shore-based initiative. Transocean LTD (NYSE:RIG) has 360.41 million shares outstanding.

Transocean LTD (NYSE:RIG) shares jumped 2.08% to $54.56 in pre-market trading. The stock is up 22% this year so far.