Transocean to buy Valaris for $5.8 billion, expanding global offshore rig fleet

By Tanay Dhumal

Feb 9 (Reuters) - Oilfield services firm Transocean RIG.N said on Monday it would acquire peer Valaris VAL.N in an all-stock deal valued at $5.8 billion, expanding its exposure across deepwater, harsh-environment and shallow-water basins worldwide.

Transocean's shares were marginally down, while Valaris' shares were up 24.3% at $77.64 in morning trade.

Oilfield service providers have followed energy producers and pursued deals to navigate operational and pricing pressures, as customers rein in spending on new wells and prioritize returns to investors.

Transocean, which had $4.85 billion in long-term debt as of September 30, said the deal will support debt reduction through cost savings, stronger cash flows and improved scale following the merger.

“We know that our debt level negatively impacts our equity value. This transaction addresses that,” said Transocean CEO Keelan Adamson during a conference call. He added that he expects the company's leverage ratio to drop to about 1.5 times within 24 months of closing.

The companies said the combined firm will have an enterprise value of roughly $17 billion and will own a fleet of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles and 31 modern jackups.

Under the terms of the all-stock transaction, Valaris shareholders will receive a fixed exchange ratio of 15.235 shares of Transocean stock for each Valaris share. This values Valaris at $82.12 per share, a 31.6% premium to its last close, according to a Reuters calculation.

In addition to its ongoing cost-reduction program, which is expected to cut expenditure by more than $250 million through 2026, it had identified an extra $200 million in cost-saving benefits stemming from the transaction, Transocean said.

Transocean will hold 53% of the combined firm and Valaris will hold the remaining 47%, the companies said.

The companies expect the deal to close in the second half of 2026.