Transocean to Buy Valaris in $5.8 Billion All-Stock Offshore Drilling Merger

Core Viewpoint - Transocean Ltd. has agreed to acquire Valaris Limited in an all-stock transaction valued at approximately $5.8 billion, creating a combined entity with a significant presence in the offshore drilling industry [1][2] Group 1: Transaction Details - Valaris shareholders will receive 15.235 shares of Transocean for each Valaris share, resulting in Transocean shareholders owning about 53% of the combined company and Valaris shareholders holding 47% [2] - The merger is expected to close in the second half of 2026, pending regulatory and shareholder approvals [2] Group 2: Fleet and Market Position - The merger will create the world's highest-quality offshore drilling fleet, consisting of 73 rigs across major offshore segments, including 33 ultra-deepwater drillships, nine semisubmersibles, and 31 modern jackups [3] - The combined fleet will enhance customer access in key offshore basins, including the U.S. Gulf of Mexico, Brazil, West Africa, the Middle East, and the North Sea, amid a resurgence in offshore investment [4] Group 3: Financial Impact - The combined backlog is estimated at approximately $10 billion, which will strengthen cash flow visibility as operators focus on long-cycle offshore projects [4] - Transocean anticipates unlocking over $200 million in cost synergies from the merger, in addition to an existing cost-reduction program targeting over $250 million in cumulative savings through 2026 [5] - The deal is expected to increase cash flow, accelerate deleveraging, and enhance financial flexibility, aiming for a leverage ratio of around 1.5x within two years of closing [5] Group 4: Management Structure - The combined company will be led by Transocean President and CEO Keelan Adamson, with current Transocean CEO Jeremy Thigpen serving as Executive Chairman of the Board [7] - The board will consist of nine Transocean directors and two Valaris directors, with Transocean remaining incorporated in Switzerland and its primary administrative office located in Houston [7]