Transocean Ltd and Valaris Limited announced, in a joint statement, the signing of a definitive agreement to combine the two companies.
Under the agreement, Transocean will acquire Valaris in an all-stock transaction valued at approximately $5.8 billion, the statement noted. The shareholding percentages of the combined company, on a fully diluted basis, will be approximately 53 percent for Transocean and 47 percent for Valaris, according to the statement.
Valaris shareholders will receive a fixed exchange ratio of 15.235 shares of Transocean stock for each common share of Valaris under the terms of the all-stock transaction, the statement highlighted. Based on the closing prices of Transocean and Valaris on February 6, the transaction implies a combined enterprise value of approximately $17 billion, the statement noted.
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 joint statement said.
The statement outlined that the deal “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”.
It also “expands reach and customer access in world’s most attractive offshore basins” and “unlocks more than $200 million in identified cost synergies”, the statement highlighted, adding that it “increases cash flow, accelerates deleveraging, and strengthens financial flexibility”.
Keelan Adamson, Transocean President and Chief Executive Officer, said in the statement, “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”.
“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,” he added.
“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,” he continued.
Valaris Chief Executive Officer Anton Dibowitz said in the statement, “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,” he added.
In a statement commenting on the Transocean-Valaris deal – which was sent to Rigzone by the Wood Mackenzie team late Monday – Leslie Cook, Principal Analyst, Upstream Supply Chain for Wood Mackenzie said, “once finalized, Transocean will solidify their market leading position in the high spec ultra-deepwater rig market and become a top-five player in the high spec jack-up market”.
“We are in a highly consolidated market with little room for organic growth. As a result, we did expect to see more consolidation this year and acquiring new backlog makes sense for Transocean,” Cook added.
“As the market moves closer to the duopoly conditions that other supply chain sectors exhibit, rig owners will gain pricing power … Short-term this supports prices. Longer-term, it positions Transocean to more efficiently capitalize on offshore upcycles,” Cook continued.
“We have been signaling that the upstream sector is continuing to consolidate … This deal further supports our bullish view on M&A as a strategic growth lever for offshore rig companies,” Cook went on to state.
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