Transocean Ltd. (NYSE: RIG) and Valaris Limited (NYSE: VAL) today announced the signing of a definitive agreement to combine the two companies under which Transocean will acquire Valaris in an all-stock transaction valued at approximately $5.8 billion (all currency in USD). The shareholding percentages of the combined company, on a fully diluted basis1, will be approximately 53% for Transocean and 47% for Valaris. The enterprise value of the pro forma company is approximately $17 billion.
Highlights
- Creates an industry leader with a diversified offshore fleet of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles and 31 modern jackups, to meet emerging growth opportunities
- Expands reach and customer access in world’s most attractive offshore basins
- Unlocks more than $200 million in identified cost synergies, additive to Transocean’s ongoing cost savings initiative
- Increases cash flow, accelerates deleveraging and strengthens financial flexibility
- Estimated pro forma market capitalization of $12.3 billion
- Improves trading liquidity and capital markets profile, including an expanded investor base and opportunities for additional equity index inclusion
“This transaction creates a very attractive investment in the offshore drilling industry, differentiated by the best fleet, proven people, leading technologies, and unequalled customer service,” said Keelan Adamson, Transocean President and Chief Executive Officer. “The powerful combination is well-timed to capitalize on an emerging, multi-year offshore drilling upcycle. Investors and our global customers will benefit from our expanded fleet of best-in-class, high-specification rigs. We have identified more than $200 million in cost synergies that will complement our ongoing efforts to safely lower costs. The strong pro forma cash flow enables us to accelerate debt reduction, resulting in an expected leverage ratio of about 1.5x within 24 months of the transaction closing.”
Valaris Chief Executive Officer Anton Dibowitz said, “By combining with Transocean, we will create a new industry leader for the benefit of our shareholders, customers and employees. We look forward to complementing Transocean’s high-specification deepwater assets with our own, while returning world class jackup expertise to Transocean’s business, creating a combined company that is capable of operating any rig at any water depth in any offshore environment around the world.”
A powerful combination
The transaction brings together highly complementary, premium offshore assets. On a pro forma basis, the company will own 73 rigs able to serve customers in deepwater, harsh environment, and shallow water basins around the world.
An industry-leading combined backlog of approximately $10 billion enhances Transocean’s cash flow visibility. In addition to Transocean’s ongoing cost-reduction program, which is expected to reduce costs by more than $250 million in aggregate through 2026, identified incremental transaction-related synergies of more than $200 million will strengthen Transocean’s financial flexibility.
Transocean’s senior management team will be led by CEO Keelan Adamson, and Jeremy Thigpen will serve as Executive Chairman of the Board. The board will be comprised of nine current Transocean directors and two current Valaris directors. Transocean will remain incorporated in Switzerland, with its primary administrative office in Houston.
Structure and Conditions
Under the terms of the all-stock transaction, Valaris shareholders will receive a fixed exchange ratio of 15.235 shares of Transocean stock for each common share of Valaris. Based on the closing prices of Transocean and Valaris on February 6, 2026, the transaction implies a combined enterprise value of approximately $17 billion.
Upon completion and on a fully diluted basis, Transocean shareholders will own approximately 53% of the combined company, with Valaris shareholders owning the remaining 47%.
The transaction will be carried out by way of a court-approved scheme of arrangement under the Companies Act 1981, as amended, of Bermuda (the “Bermuda Companies Act”).
The transaction was unanimously approved by the boards of directors of both companies and is expected to close in the second half of 2026, subject to regulatory approvals and customary closing conditions, and approvals by the shareholders of each company. The parties received shareholder support agreements from Perestroika AS which owns approximately 9% of the shares outstanding of Transocean, and Famatown Finance Limited and Oak Hill Advisors, which collectively own approximately 18% of Valaris’ outstanding shares, committing to vote in favor of this transaction.
Transaction Advisors
Evercore is acting as lead financial advisor to Transocean. Hogan Lovells, Homburger, and Appleby (Bermuda) Limited are acting as legal advisors to Transocean. DrivePath Advisors is Transocean’s financial communications consultant. Goldman Sachs & Co. LLC and Skadden, Arps, Slate, Meagher & Flom LLP, Lenz & Staehlin, and Conyers Dill & Pearman Limited are financial advisors and legal advisors, respectively, to Valaris. Joele Frank, Wilkinson Brimmer Katcher is serving as strategic communications advisor to Valaris.
