Transocean Ltd. (NYSE: RIG), a leading international provider of offshore contract drilling services, announced today that it has entered into a definitive agreement to acquire Valaris Limited (NYSE: VAL) in an all-stock transaction valued at approximately $5.8 billion. The transaction creates one of the largest and most diversified offshore drilling companies in the world, with a pro forma enterprise value of approximately $17 billion.
Under the terms of the agreement, Valaris shareholders will receive a fixed exchange ratio of 15.235 shares of Transocean stock for each Valaris common share. Based on the companies’ closing prices on February 6, 2026, Transocean shareholders will own approximately 53% of the combined company on a fully diluted basis, with Valaris shareholders owning the remaining 47%.
A Strategic Combination of Premium Offshore Assets
Transocean is widely recognized for operating the highest-specification floating offshore drilling fleet in the world, with a strong focus on ultra-deepwater and harsh-environment drilling. The company currently owns or operates a fleet of 27 mobile offshore drilling units, including 20 ultra-deepwater floaters and seven harsh-environment floaters.
Valaris brings complementary strengths, operating a high-quality fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups. With operations spanning nearly every major offshore basin globally, Valaris has established itself as an industry leader across all water depths and geographies, emphasizing safety, operational excellence, and technological innovation.
On a pro forma basis, the combined company will own 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles, and 31 modern jackups, significantly expanding its ability to serve customers in deepwater, harsh-environment, and shallow-water markets worldwide.
Financial and Operational Benefits
The transaction is expected to deliver substantial financial and operational benefits. The combined company will have an industry-leading contract backlog of approximately $10 billion, enhancing cash flow visibility and providing a strong foundation for long-term planning.
Transocean has identified more than $200 million in incremental cost synergies related to the transaction, additive to its ongoing cost-reduction program, which is expected to reduce costs by more than $250 million in aggregate through 2026. Management expects the stronger pro forma cash flow to accelerate debt reduction, targeting a leverage ratio of approximately 1.5x within 24 months of closing.
“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, Transocean’s President and Chief Executive Officer. “The powerful combination is well-timed to capitalize on an emerging, multi-year offshore drilling upcycle.”
The combined company is expected to have an estimated pro forma market capitalization of approximately $12.3 billion, improved trading liquidity, and a stronger capital markets profile, potentially enabling broader equity index inclusion.
Leadership and Transaction Structure
Following the close of the transaction, Transocean’s senior management team will continue to lead the combined company, with Keelan Adamson serving as Chief Executive Officer. Jeremy Thigpen will assume the role of Executive Chairman of the Board. The board will consist of nine current Transocean directors and two current Valaris directors.
Transocean will remain incorporated in Switzerland, with its primary administrative office in Houston. Valaris Limited is a Bermuda exempted company, and the transaction will be completed through a court-approved scheme of arrangement under Bermuda’s Companies Act.
The transaction has been 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, customary closing conditions, and approval by shareholders of both companies. Shareholder support agreements have already been secured from Perestroika AS, which owns approximately 9% of Transocean’s outstanding shares, and from Famatown Finance Limited and Oak Hill Advisors, which collectively own approximately 18% of Valaris’ outstanding shares.
Industry Context and Recent Trends
The offshore drilling industry has been undergoing a period of consolidation following years of financial stress, bankruptcies, and asset rationalization. In recent years, the number of offshore drillers operating globally has declined sharply, leaving a smaller group of companies with increasingly high-quality fleets.
At the same time, energy producers have become more disciplined with capital spending, prioritizing returns over aggressive production growth. This has favored offshore projects with long reserve lives and lower decline rates, particularly in deepwater basins such as the Gulf of Mexico, Brazil, and offshore West Africa.
Oilfield service providers, including offshore drillers, have increasingly pursued mergers to improve scale, reduce costs, and enhance pricing power amid ongoing operational and pricing pressures. As available high-specification rigs remain constrained, leading contractors have been better positioned to benefit from improving dayrates and utilization.
Against this backdrop, the Transocean–Valaris combination reflects a broader industry trend toward creating larger, financially stronger players capable of supporting complex offshore developments while delivering improved returns to shareholders.
