In a major development for the offshore drilling sector, Transocean (NYSE: RIG) and Valaris (NYSE: VAL) have announced a merger that will create a new industry leader. Together, the combined company will be valued at approximately $17 billion, positioning it to significantly reshape the global offshore drilling landscape.

Under the terms of the all-stock transaction, Transocean shareholders will own roughly 53% of the combined entity, while Valaris shareholders will hold the remaining 47%.

A More Diversified Fleet to Capture New Opportunities

As a result of the merger, the new company will operate a diversified fleet of 73 rigs, including:

• 33 ultra-deepwater drillships

• 9 semisubmersibles

• 31 modern jackups

Consequently, this expanded fleet will be better positioned to capture growth opportunities across the world's most attractive offshore basins. In addition, by combining their strengths, Transocean and Valaris will be able to serve customers across deepwater, harsh environment, and shallow water basins on a truly global scale.

Synergies, Cost Reductions, and Stronger Financial Flexibility

Equally important, the merger is expected to unlock more than $200 million in cost synergies, which will strengthen Transocean's ongoing cost-reduction initiatives. Furthermore, these initiatives are projected to reduce costs by more than $250 million in total through 2026.

As a result, the combined company should benefit from:

• increased cash flow

• faster deleveraging

• improved financial flexibility

Meanwhile, the pro forma market capitalization is estimated at $12.3 billion, which should also enhance trading liquidity and expand the investor base.

Leadership and Governance Structure

From a leadership standpoint, the combined company will be led by Transocean President and CEO Keelan Adamson, while Jeremy Thigpen will serve as Executive Chairman of the Board.

In terms of governance, the board will include nine current Transocean directors and two current Valaris directors. Additionally, Transocean will remain incorporated in Switzerland, with its primary administrative office continuing to operate from Houston.

A Stronger Competitive Position in Offshore Drilling

Not only does this merger combine highly complementary fleets, but it also creates a company capable of operating at any water depth and in virtually any offshore environment. Moreover, with an industry-leading backlog of approximately $10 billion, the new entity will gain stronger cash flow visibility and a more resilient financial profile.

Accordingly, Keelan Adamson described the transaction as well-timed to capitalize on a multi-year offshore drilling upcycle, stating:

"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."

Similarly, Valaris CEO Anton Dibowitz highlighted the value of combining Valaris' jackup expertise with Transocean's high-specification deepwater fleet. Ultimately, Dibowitz emphasized that the merger will benefit shareholders, customers, and employees alike.

Transaction Details and Expected Timeline

The merger has been unanimously approved by both boards and will be executed through a court-approved scheme of arrangement under the Bermuda Companies Act.

Under the agreement, Valaris shareholders will receive 15.235 shares of Transocean stock for each Valaris share.

At the same time, the transaction is expected to close in the second half of 2026, pending regulatory approvals, customary closing conditions, and shareholder votes.

Notably, several major shareholders--including Perestroika AS, Famatown Finance Limited, and Oak Hill Advisors--have already committed to voting in favor of the deal.

Advisors and Upcoming Conference Call

In preparation for the merger, Transocean has appointed Evercore as its lead financial advisor. In addition, legal counsel will be provided by Hogan Lovells, Homburger, and Appleby (Bermuda) Limited.

Meanwhile, Valaris is being advised by Goldman Sachs & Co. LLC and Skadden, Arps, Slate, Meagher & Flom LLP, among others.

To further explain the transaction, both companies will host a joint conference call and webcast on Monday, February 9, 2026.

About Transocean and Valaris

Transocean is a leading provider of offshore contract drilling services, with a strong focus on ultra-deepwater and harsh environment drilling. Currently, the company operates 27 mobile offshore drilling units, including:

• 20 ultra-deepwater floaters

• 7 harsh environment floaters

Valaris, on the other hand, is a global leader in offshore drilling services with a modern fleet of ultra-deepwater drillships, semisubmersibles, and jackups. Additionally, Valaris is widely recognized for its emphasis on safety, operational excellence, and innovation across nearly every major offshore basin worldwide.

Conclusion

Overall, this merger represents a major milestone for the offshore drilling industry. By combining a diversified fleet, stronger financial flexibility, and complementary operational strengths, the new company is positioned to lead the market into its next growth cycle.

Ultimately, with scale, backlog strength, and global reach, the combined enterprise appears ready to define a new era of offshore drilling leadership.

The post Transocean and Valaris Announce $17 Billion Merger to Create Offshore Drilling Industry Leader appeared first on PRISM MarketView.

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