Transocean Ltd. and Valaris Limited announced on Monday that they will merge in an all-stock deal, creating one of the largest offshore drilling companies in the world, with a total value of around $17 billion.
This agreement, valued at about $5.8 billion in equity, means Transocean shareholders will own approximately 53% of the new company, while Valaris shareholders will hold the remaining 47%.
The merger will combine a fleet of 73 rigs, which include ultra-deepwater, harsh-environment, and shallow-water units. This fleet consists of 33 ultra-deepwater drillships, nine semisubmersibles, and 31 modern jackups. The new company will also have a strong backlog worth about $10 billion.
Keelan Adamson, President and CEO of Transocean, described the merger as a great investment opportunity in the offshore drilling sector, emphasizing that it comes at a perfect time during a multi-year uptrend in drilling activities.
The companies expect that the merger will create over $200 million in cost savings, in addition to Transocean's current cost-cutting initiative, which aims for over $250 million in savings by 2026.
Anton Dibowitz, CEO of Valaris, stated that this merger would bring together top-notch jackup expertise, allowing the new company to operate in all offshore environments and depths.
Valaris shareholders will receive 15.235 shares of Transocean stock for each share they own. Adamson will remain the CEO of the merged company, while Valaris CEO Jeremy Thigpen will take on the role of executive chairman.
The new company will continue to be incorporated in Switzerland, with its main office in Houston.
Both boards have unanimously approved the transaction, which is expected to finalize in the second half of 2026, pending regulatory approvals and shareholder votes. Key shareholders from both companies have already expressed their support for the merger.
Management indicates that the strong cash flow generated by the combined fleet will help reduce debt quickly, with expectations that leverage will decrease to around 1.5 times within two years post-merger.
Industry analysts have noted the strategic timing of this deal. Leslie Cook, Principal Analyst for Upstream Supply Chain at Wood Mackenzie, pointed out that once the merger is complete, Transocean will strengthen its leading position in the high-spec ultra-deepwater rig market and rank among the top five in the high-spec jack-up market.
“We are in a highly consolidated market with limited opportunities for organic growth. Therefore, it is not surprising to see more mergers this year, and acquiring new backlog is a smart move for Transocean,” Cook added.
Evercore is advising Transocean on the deal, while Goldman Sachs is advising Valaris. The companies are set to discuss the merger during a joint investor call later today.