Transocean, Valaris To Form $17 Billion Offshore Drilling Firm – VAL Stock Jumps 13%, RIG Slumps 6% In Pre-Market

Transocean announced on Monday that it has signed an agreement to acquire Valaris in an all-stock transaction valued at about $5.8 billion

Transocean Ltd. (RIG) announced on Monday that it has signed an agreement to acquire Valaris (VAL) in an all-stock transaction valued at about $5.8 billion. The deal will create a combined company with an enterprise value of roughly $17 billion.

Upon completion, Transocean shareholders will own around 53% of the new entity, while Valaris investors will hold the remaining 47%. Valaris shareholders will receive a fixed exchange ratio of 15.235 Transocean shares for each Valaris share.

RIG stock was down around 6% in pre-market trading while VAL shares jumped nearly 13%.

The merger will establish an offshore drilling firm with a fleet of 73 rigs, including ultra-deepwater drillships, semisubmersibles, and modern jackups.

“We have identified more than $200 million in cost synergies that will complement our ongoing efforts to safely lower costs. 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,” said Keelan Adamson, Transocean President and Chief Executive Officer.

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