On Monday, Valaris Ltd. (NYSE:VAL) stock is trading higher after the company disclosed a deal to be acquired by Transocean Ltd. (NYSE:RIG) for around $5.8 billion.
- VAL is challenging its highest level of the year. Track live prices here.
Deal Terms
Under the terms of the all-stock transaction, Valaris shareholders will receive 15.235 shares of Transocean stock for each Valaris share.
Using the closing prices of Transocean and Valaris on February 6, 2026, the deal reflects a combined enterprise value of roughly $17 billion.
Once finalized, Transocean shareholders will hold about 53% of the combined company on a fully diluted basis, with Valaris shareholders owning the remaining 47%.
Merger Creates New Offshore Drilling Powerhouse
The transaction creates a leading offshore drilling company with a diversified fleet of 73 rigs, including 33 ultra‑deepwater drillships, nine semisubmersibles, and 31 modern jackups, positioning the company to capture growth opportunities.
The company expands customer access in the world’s most attractive offshore basins, while unlocking over $200 million in identified cost synergies on top of Transocean’s ongoing savings initiatives.
The deal enhances cash flow, accelerates deleveraging, and strengthens financial flexibility, with an estimated pro forma market capitalization of $12.3 billion.
Management Commentary
Keelan Adamson, Transocean President and CEO, said, “The powerful combination is well-timed to capitalize on an emerging, multi-year offshore drilling upcycle. Investors and our global customers will benefit from our expanded fleet of best-in-class, high-specification rigs.”
“The strong pro forma cash flow enables us to accelerate debt reduction, resulting in an expected leverage ratio of about 1.5x within 24 months of the transaction closing.”
What This Acquisition Means For Investors?
Alongside Transocean’s ongoing cost‑reduction program, which is projected to cut over $250 million in total costs through 2026, the deal is expected to deliver more than $200 million in additional transaction-related synergies.
The transaction is expected to close in the second half of 2026, subject to regulatory and shareholder approvals.
Transocean’s President and CEO Keelan Adamson noted, “The powerful combination is well-timed to capitalize on an emerging, multi-year offshore drilling upcycle.”
Key Drivers Behind The $5.8 Billion Deal
The merger will result in a significant industry player with an industry-leading backlog of approximately $10 billion, enhancing cash flow visibility.
The deal was unanimously approved by the boards of directors of both companies.
Valaris is known for its high-quality rig fleet and operational excellence, with a focus on technology and innovation, making it a strategic fit for Transocean’s growth plans.
Valaris expects its fourth quarter 2025 earnings results on February 19, 2026.
VAL Price Action: Valaris shares were up 20.39% at $75.13 at the time of publication on Monday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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