Transocean Ltd and Valaris Limited announced Monday they have entered into a definitive agreement under which Transocean will acquire Valaris in an all-stock transaction valued at approximately $5.8 billion. The deal will create one of the world’s largest offshore drilling contractors, with a pro forma enterprise value of roughly $17 billion and an estimated market capitalization of $12.3 billion.
Under the terms of the agreement, Valaris shareholders will receive 15.235 shares of Transocean for each Valaris common share. Upon completion of the transaction, Transocean shareholders will own about 53% of the combined company on a fully diluted basis, while Valaris shareholders will hold approximately 47%. The companies said the merger will be executed through a court-approved scheme of arrangement under Bermuda’s Companies Act 1981 and is expected to close in the second half of 2026, subject to regulatory and shareholder approvals.
The combination will create an industry leader with a diversified fleet of 73 offshore rigs, including 33 ultra-deepwater drillships, nine semisubmersibles and 31 modern jackups. The expanded fleet is expected to enhance the company’s ability to serve customers across deepwater, harsh environment and shallow water basins worldwide, positioning it to capitalize on what executives describe as a multi-year offshore drilling upcycle.
“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, President and Chief Executive Officer of Transocean. Adamson added that the combined company has identified more than $200 million in cost synergies, which will complement Transocean’s existing cost-savings program aimed at reducing expenses by more than $250 million through 2026. He said the stronger pro forma cash flow is expected to accelerate debt reduction, targeting a leverage ratio of about 1.5x within 24 months after closing.
Valaris Chief Executive Officer Anton Dibowitz said the merger would create a new industry leader capable of operating across all water depths and offshore environments. He highlighted the complementary nature of the companies’ assets, noting that Valaris’ jackup expertise will enhance Transocean’s high-specification deepwater portfolio.
The pro forma company is expected to benefit from a combined backlog of approximately $10 billion, improving revenue visibility and cash flow stability. In addition to identified transaction-related synergies exceeding $200 million, the combined entity is expected to strengthen its financial flexibility and expand its investor base, potentially improving trading liquidity and eligibility for additional equity index inclusion.
Following the close of the transaction, Transocean’s senior management team will lead the combined company, with Adamson serving as CEO and Jeremy Thigpen as Executive Chairman of the Board. The board will include nine current Transocean directors and two current Valaris directors. Transocean will remain incorporated in Switzerland and maintain its primary administrative office in Houston.
The transaction has been unanimously approved by the boards of both companies. The parties have also secured shareholder support agreements from Perestroika AS, which owns approximately 9% of Transocean’s outstanding shares, and Famatown Finance Limited and Oak Hill Advisors, which together own roughly 18% of Valaris’ outstanding shares, committing to vote in favor of the deal.
