Swiss offshore drilling giant Transocean is set to acquire its rival Valaris, a move that will reshape the global high-end drilling platform market and inject new momentum into the consolidation cycle of the offshore drilling industry.
On February 9, Transocean announced via its official website that it had signed a definitive merger agreement to acquire Valaris, a U.S.-listed offshore drilling vessel owner, in an all-stock transaction valued at approximately $5.8 billion. Following the merger, Transocean and Valaris will hold 53% and 47% equity stakes in the new company, respectively. The enterprise value of the pro forma company is approximately $17 billion.
Highlights
- The merger has been unanimously approved by the boards of both companies and is expected to close in the second half of 2026, subject to regulatory and shareholder approvals. The combined entity will have an order backlog of approximately $10 billion.
- Creates an industry leader with a diversified offshore fleet of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles and 31 modern jackups, to meet emerging growth opportunities
- Expands reach and customer access in world’s most attractive offshore basins
Unlocks more than $200 million in identified cost synergies, additive to Transocean’s ongoing cost savings initiative - Increases cash flow, accelerates deleveraging and strengthens financial flexibility
- Estimated pro forma market capitalization of $12.3 billion
- Improves trading liquidity and capital markets profile, including an expanded investor base and opportunities for additional equity index inclusion
Valaris Chief Executive Officer Anton Dibowitz said, “The powerful combination is well-timed to capitalize on an emerging, multi-year offshore drilling upcycle. Investors and our global customers will benefit from our expanded fleet of best-in-class, high-specification rigs. We have identified more than $200 million in cost synergies that will complement our ongoing efforts to safely lower costs. The strong pro forma cash flow enables us to accelerate debt reduction, resulting in an expected leverage ratio of about 1.5x within 24 months of the transaction closing.”
Valaris Chief Executive Officer Anton Dibowitz said, “By combining with Transocean, we will create a new industry leader for the benefit of our shareholders, customers and employees. We look forward to complementing Transocean’s high-specification deepwater assets with our own, while returning world class jackup expertise to Transocean’s business, creating a combined company that is capable of operating any rig at any water depth in any offshore environment around the world.”
A powerful combination
The transaction brings together highly complementary, premium offshore assets. On a pro forma basis, the company will own 73 rigs able to serve customers in deepwater, harsh environment, and shallow water basins around the world.
An industry-leading combined backlog of approximately $10 billion enhances Transocean’s cash flow visibility. In addition to Transocean’s ongoing cost-reduction program, which is expected to reduce costs by more than $250 million in aggregate through 2026, identified incremental transaction-related synergies of more than $200 million will strengthen Transocean’s financial flexibility.
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. Transocean will remain incorporated in Switzerland, with its primary administrative office in Houston.