Transocean Ltd (NYSE: RIG) and Valaris Limited (NYSE: VAL) have announced a definitive agreement to combine the two companies in an all-stock transaction valued at approximately $5.8 billion. The shareholding percentages of the combined company, on a fully diluted basis, will be approximately 53% for Transocean and 47% for Valaris. The enterprise value of the pro forma company is approximately $17 billion.
The transaction creates an industry leader with a diversified offshore fleet of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles, and 31 modern jackups. This is expected to unlock more than $200 million in identified cost synergies, in addition to Transocean's ongoing cost savings initiative.
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 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 companies have 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 the transaction.
The combined backlog of approximately $10 billion enhances Transocean’s cash flow visibility. Identified incremental transaction-related synergies of more than $200 million will strengthen Transocean’s financial flexibility.
As a result of the transaction, Transocean's estimated pro forma market capitalization is $12.3 billion, and the company expects to have an improved trading liquidity and capital markets profile.
The transaction was unanimously approved by the boards of directors of both companies. Evercore is acting as the lead financial advisor to Transocean, while Goldman Sachs & Co. LLC is advising Valaris.
The companies plan to host a joint conference call and webcast to discuss the transaction.
Transocean is a leading international provider of offshore contract drilling services for oil and gas wells, specializing in ultra-deepwater and harsh environment drilling services. Valaris is an industry leader in offshore drilling services across all water depths and geographies, operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups. As a result of these announcements, the company's shares have moved -2.54% on the market, and are now trading at a price of $4.23. For the full picture, make sure to review Transocean's 8-K report.
