On Monday, shares of Valaris Ltd. (NYSE:VAL) climbed notably amid news of a pending acquisition by Transocean Ltd. (NYSE:RIG). The agreement, structured as an all-stock transaction, values the deal at around $5.8 billion and has propelled Valaris shares toward their highest level seen this year.
Under the terms of the arrangement, each Valaris shareholder will receive 15.235 shares of Transocean common stock for every Valaris share they hold. Based on the closing stock prices from February 6, 2026, this reflects a combined enterprise valuation close to $17 billion.
Upon completion of the merger, ownership is projected to be divided such that Transocean shareholders will possess approximately 53% of the merged entity on a fully diluted basis, while Valaris shareholders will control the remaining 47%. This ownership split reflects the relative size and valuation of the two companies in the transaction.
This merger will establish a leader in the offshore drilling industry, blending fleets to total 73 rigs across various segments. The combined assets include 33 ultra-deepwater drillships, nine semisubmersibles, and 31 modern jackup rigs, thereby positioning the new entity to capitalize on growth possibilities in key global offshore basins.
Moreover, the consolidation aims to optimize operational efficiencies by targeting cost synergies exceeding $200 million in addition to ongoing expense reduction programs already underway at Transocean. The transaction is expected to enhance overall cash flow generation, accelerate the reduction of debt levels, and increase financial flexibility. The market capitalization of the post-merger entity is forecasted at about $12.3 billion.
Speaking on the deal, Keelan Adamson, President and Chief Executive Officer of Transocean, highlighted that the timing of the combination aligns with a strengthening offshore drilling sector poised for a multi-year upcycle. He emphasized that investors and customers stand to benefit from access to a fleet comprised of high-specification, best-in-class drilling rigs.
Adamson also noted the solid pro forma cash flow profile anticipated from the merger will allow for more aggressive deleveraging, with the leverage ratio expected to fall to approximately 1.5 times within two years post-close.
Beyond the direct operational benefits, the merger complements Transocean’s existing initiatives to lower costs by more than $250 million through 2026. When combined with synergy gains from the transaction, total cost savings are expected to significantly strengthen the company's competitive position in offshore drilling markets.
Completion of the acquisition remains subject to regulatory clearances and shareholder approvals, with expectations for closing in the second half of 2026.
The deal matches Valaris’ reputation for maintaining a technologically advanced and efficient rig fleet with Transocean’s growth ambitions, thus creating meaningful value through strategic alignment. Valaris is scheduled to report its fourth-quarter earnings for 2025 on February 19, 2026.
Following the announcement, Valaris stock price rose more than 20 percent to $75.13, reaching a new 52-week high. This positive market reaction underscores investor confidence in the benefits anticipated from the merger.
The boards of directors from both Valaris and Transocean have unanimously approved the transaction, signaling strong internal support.
Key attraction factors for the merger include the resultant company’s leading backlog in the offshore drilling industry, valued at roughly $10 billion, which offers improved visibility into future cash flows. Additionally, the expanded geographic customer reach and enhanced fleet capabilities improve the strategic positioning of the combined firm to seize opportunities in attractive offshore basins worldwide.