Transocean to acquire Valaris in $5.8-billion deal, creating offshore drilling giant
(WO) — Transocean Ltd. has agreed to acquire offshore driller Valaris Ltd. in an all-stock transaction valued at approximately $5.8 billion, creating what the companies say will be the world’s highest-specification offshore drilling fleet and one of the largest global offshore contractors.
The combined company will have an implied enterprise value of about $17 billion and a pro forma market capitalization of roughly $12.3 billion. Upon closing, Transocean shareholders will own approximately 53% of the combined company and Valaris shareholders about 47% on a fully diluted basis.
The merger brings together a fleet of 73 offshore rigs, including 33 ultra-deepwater drillships, nine semisubmersibles and 31 modern jackups, significantly expanding the combined company’s global reach across deepwater, harsh-environment and shallow-water markets.
Transocean President and CEO Keelan Adamson said the combination comes as offshore activity strengthens globally. “The powerful combination is well-timed to capitalize on an emerging, multi-year offshore drilling upcycle,” Adamson said, noting that the enlarged fleet and customer base are expected to support stronger cash flow and long-term contract visibility.
The combined company will also hold an estimated $10-billion contract backlog, improving revenue visibility as offshore spending increases across key basins including the U.S. Gulf of Mexico, Brazil, West Africa and the Middle East.
Executives said the merger is expected to unlock more than $200 million in annual cost synergies, in addition to Transocean’s existing cost-reduction program targeting more than $250 million in savings through 2026. The companies expect the transaction to strengthen free cash flow and accelerate debt reduction, with a projected leverage ratio of roughly 1.5x within two years of closing.
Valaris President and CEO Anton Dibowitz said the deal combines complementary assets and capabilities. “The combined company will be capable of operating any rig at any water depth in any offshore environment around the world,” he said, highlighting the return of jackup scale to Transocean’s portfolio alongside its deepwater leadership.
Following the transaction, Adamson will continue as CEO of the combined company, while Jeremy Thigpen will serve as executive chairman. The board will include nine current Transocean directors and two Valaris directors. Transocean will remain incorporated in Switzerland with primary administrative offices in Houston.
Under the terms of the agreement, Valaris shareholders will receive 15.235 shares of Transocean stock for each Valaris share. The transaction is subject to customary regulatory approvals and shareholder votes from both companies.
