Transocean Ltd (NYSE: RIG) and Valaris Limited (NYSE: VAL) have announced a definitive agreement to combine the two companies under an all-stock transaction valued at approximately $5.8 billion. The transaction will create a new industry leader with a diversified offshore fleet of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles, and 31 modern jackups.
The enterprise value of the pro forma company is estimated to be approximately $17 billion, with a pro forma market capitalization of $12.3 billion. This combination is expected to unlock over $200 million in identified cost synergies, in addition to Transocean's ongoing cost savings initiative.
As a result of the transaction, 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.
Upon completion, 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 strengthen Transocean's financial flexibility, improve trading liquidity, and enhance its capital markets profile. It is anticipated to increase cash flow, accelerate deleveraging, and result in an expected leverage ratio of about 1.5x within 24 months of the transaction closing.
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, as well as approvals by the shareholders of each company.
The companies have identified incremental transaction-related synergies of more than $200 million, which are expected to strengthen Transocean’s financial flexibility. This is in addition to Transocean’s ongoing cost-reduction program, which is expected to reduce costs by more than $250 million in aggregate through 2026.
Additionally, the combined company will have an industry-leading backlog of approximately $10 billion, enhancing Transocean’s cash flow visibility.
This acquisition is anticipated to complement Transocean’s high-specification deepwater assets with Valaris' jackup expertise, creating a combined company capable of operating any rig at any water depth in any offshore environment around the world. Following these announcements, the company's shares moved -1.33%, and are now trading at a price of $53.99. For more information, read the company's full 8-K submission here.
