Yahoo Finance·2026-02-13 17:14Company Overview - Valaris shares increased by 48.1% this week following the announcement of a merger with Transocean, creating the largest offshore oil rig company in public markets [1] - The merger agreement stipulates that each Valaris shareholder will receive 15.235 Transocean shares for each Valaris share owned, reflecting a 31.6% premium to Valaris' price prior to the announcement [3] Merger Details - The resulting company will be owned 53% by Transocean shareholders and 47% by Valaris shareholders, with Transocean's CEO retaining his position and nine out of eleven board seats [3] - The merger is expected to generate $200 million in cost synergies, in addition to Transocean's existing target of $250 million in expense reductions over 2025 and 2026 [4] Industry Context - The merger positions Transocean and Valaris as the largest offshore oil rig public company by backlog, which is anticipated to enhance profitability even in a low oil-price environment [5] - The offshore rig industry has faced challenges over the past decade due to the shift towards lower-carbon vehicles and hydraulic fracking technology, which have negatively impacted oil prices and rig operators' rates [5] - As the industry consolidates, fewer players are expected to become more profitable, making them appealing to investors looking to capitalize on rising oil prices [6]