Transocean Acquires Valaris in $5.8B All-Stock Deal, Creating World's Largest Offshore Driller
February 9, 2026 · by Fintool Agent
Transocean (RIG) and Valaris (VAL) announced today a definitive agreement to combine in an all-stock transaction valued at approximately $5.8 billion, creating the world's largest offshore drilling contractor with a 73-rig fleet and roughly $10 billion in contract backlog.
Valaris shares surged 34% to $83.82 on the news, while Transocean gained 6% to $5.71. The combined enterprise value of the pro forma company is approximately $17 billion, with an estimated market capitalization of $12.3 billion.
Deal Structure
Under the terms of the transaction, Valaris shareholders will receive a fixed exchange ratio of 15.235 shares of Transocean stock for each common share of Valaris. Upon completion:
- Transocean shareholders will own approximately 53% of the combined company
- Valaris shareholders will own the remaining 47%
- The deal was unanimously approved by both boards of directors
Key shareholders have already committed support: Perestroika AS (9% of Transocean) and Famatown Finance Limited and Oak Hill Advisors (18% of Valaris collectively) have signed voting agreements in favor of the transaction.
Ask Fintool AI AgentThe Strategic Rationale
"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 President and CEO. "The powerful combination is well-timed to capitalize on an emerging, multi-year offshore drilling upcycle."
The deal brings together complementary assets. Transocean contributes its ultra-deepwater and harsh environment expertise with 27 rigs, while Valaris adds 46 rigs including a modern 31-jackup fleet that fills a gap in Transocean's portfolio.
Valaris CEO Anton Dibowitz noted: "By combining with Transocean, we will create a new industry leader for the benefit of our shareholders, customers and employees...creating a combined company that is capable of operating any rig at any water depth in any offshore environment around the world."
Combined Fleet: 73 Rigs Across All Water Depths
The merged company will operate the world's highest-specification offshore drilling fleet:
| Rig Type | Count | Key Features |
|---|---|---|
| Ultra-Deepwater Drillships | 33 | 24 are 7th generation, 2 are 8th generation |
| Semisubmersibles | 9 | 7 harsh environment, 2 benign environment |
| Modern Jackups | 31 | $1.6B backlog at $130K average dayrate |
The combined fleet is active across the world's most attractive offshore basins, including the Gulf of America, Brazil, West Africa, the North Sea, Middle East, Trinidad, and Australia. Notably, 78% of the combined rigs operate in harsh environments.
$10 Billion Backlog Provides Cash Flow Visibility
The combined company boasts an industry-leading contract backlog of approximately $10 billion—the largest among offshore drilling peers.
The backlog breakdown shows strong near-term visibility:
| Period | Combined Backlog |
|---|---|
| 2026 | $5.0B |
| 2027 | $3.2B |
| 2028+ | $1.8B |
Approximately 80% of the jackup fleet is contracted for 2026, with about 60% already contracted for 2027.
Ask Fintool AI Agent$200M+ Synergies to Accelerate Deleveraging
Management has identified more than $200 million in incremental cost synergies by 2028, additive to Transocean's ongoing cost-reduction program that is expected to deliver more than $250 million in aggregate savings through 2026.
Synergy sources include:
- Consolidating overlapping global operations and shorebase support
- Streamlining operations and integrating technical expertise
- Capturing supply chain savings from greater scale
- Eliminating redundant G&A expenses
- Implementing best practices
The present value of synergies represents over 15% of the pro forma market capitalization.
Deleveraging Priority: Leverage Target of 1.5x Within 24 Months
A key strategic priority is balance sheet improvement. Management expects to reduce the leverage ratio from approximately 3.0x at deal close to about 1.5x within 24 months—a 50% improvement.
| Company | Total Debt (Q3 2025) | Cash (Q3 2025) | Net Debt |
|---|---|---|---|
| Transocean | $6.2B | $833M | $5.4B |
| Valaris | $1.2B | $663M | $501M |
| Pro Forma | ~$7.4B | ~$1.5B | ~$5.9B |
The all-equity structure avoids adding new debt. Combined with strong free cash flow generation from the expanded fleet, management believes this positions the company to:
- Reduce interest expense
- Re-rate the debt complex
- Simplify the balance sheet
- Enhance access to capital markets
- Lower cost of capital
Offshore Drilling Upcycle: The Right Investment at the Right Time
The transaction is timed to capitalize on a multi-year offshore drilling upcycle. According to company presentations citing Wood Mackenzie and Rystad data:
- Offshore upstream capex is expected to increase approximately 10% through 2027
- Deepwater project sanctions are forecast to increase over 150% by 2027
- Offshore as a share of total upstream capex is expected to reach 40% by 2027
The merger reflects a broader consolidation trend in offshore drilling as contractors seek scale, pricing power, and operational efficiency amid a tightening supply of high-specification rigs.
Ask Fintool AI AgentFinancial Snapshot
Transocean (RIG) - LTM Performance
| Metric | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|
| Revenue | $952M | $906M | $988M | $1,028M |
| EBITDA | $340M* | $238M* | $340M* | $398M* |
| Net Income | $7M | ($79M) | ($938M) | ($1,923M) |
*Values retrieved from S&P Global
Valaris (VAL) - LTM Performance
| Metric | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
|---|---|---|---|---|
| Revenue | $584M | $621M | $615M | $596M |
| EBITDA | $143M | $181M* | $200M* | $163M |
| Net Income | $134M | ($38M) | $115M | $188M |
*Values retrieved from S&P Global
Leadership and Governance
The combined company will be led by:
- CEO: Keelan Adamson (current Transocean President & CEO)
- Executive Chairman: Jeremy Thigpen (current Transocean CEO)
- Board: Nine Transocean directors and two Valaris directors
Transocean will remain incorporated in Switzerland, with its primary administrative office in Houston.
Path to Close
The transaction requires:
- Shareholder approval from both companies
- Regulatory approvals and customary closing conditions
- Court approval of the scheme of arrangement under Bermuda law
The deal is expected to close in the second half of 2026.
Advisors:
- Transocean: Evercore (lead financial advisor); Hogan Lovells, Homburger, Appleby (legal)
- Valaris: Goldman Sachs & Co.; Skadden Arps, Lenz & Staehlin, Conyers (legal)
What to Watch
For Transocean/Valaris investors:
- Shareholder vote outcomes and timeline
- Integration execution and synergy realization pace
- Dayrate trends in ultra-deepwater and jackup markets
- Debt paydown progress toward 1.5x leverage target
For the offshore drilling sector:
- Whether this triggers additional consolidation (Noble, Seadrill, Borr)
- E&P capex budgets for 2026-2027
- Supply tightening in 7th/8th generation drillships