Offshore driller Valaris soars to all-time high on news of acquisition by Transocean

Shares of U.S. oilfield services company Valaris Limited surged on Monday, February 9, more than 34% to a record high after the announcement of a merger with peer Transocean, based in Switzerland. The deal will create one of the largest and most diversified offshore drilling companies in the world, Noble Capital Markets believes.

Valaris shares rose on the New York Stock Exchange on Monday 34.3% to close at $83.80 apiece, an all-time high. The oilfield services company’s market capitalization reached $5.97 billion.

Investors were reacting to the announcement of the merger with one of the world’s largest offshore drilling contractors, Transocean, whose shares are also trade in New York. Its stock added almost 6% to $5.71 per share, the highest level since July 2024. The company’s market capitalization now stands at $6.29 billion.

The transaction is valued at approximately $5.8 billion and will be an all-stock deal. Under the terms of the agreement, Valaris shareholders will receive about 15.2 shares of Transocean stock for each common share. This implies a premium of about 32% versus the U.S. company’s closing share price on Friday, the last day before the merger was announced.

Upon closing of the transaction, scheduled for the second half of 2026, Transocean shareholders will own about 53% of the combined company, with the remaining 47% held by Valaris shareholders.

The merger has already been approved by the boards of both companies and now requires approval from shareholders, regulators, and courts. The latter reflects the fact that Valaris is registered in Bermuda, where the reorganization scheme must be court-approved. The parties have already secured support from several major shareholders, they said in the press release.

The combined company is expected to have a market capitalization of $12.3 billion, Valaris and Transocean said in their announcement. The merger should improve share liquidity and strengthen the company's position in capital markets with an expanded investor base and potential inclusion in stock indexes.

Inclusion in an index increases demand for stocks and boosts their trading volumes, Freedom Finance Global analyst Georgy Timoshin said.

The deal will create one of the largest and most diversified offshore drilling companies in the world, Noble Capital Markets noted. Transocean provides offshore oil and gas contract drilling services, primarily in ultra-deepwater and harsh environments. Valaris operates across all water depths and geographies.

The combined company will own 73 rigs, and the combined backlog will total about $10 billion, which, according to the companies’ announcement, is the largest in the industry.

The merger is expected to increase transparency, strengthen financial stability, and reduce costs by about $200 million, the companies said.

Wall Street remains cautious on the outlook for both stocks. Valaris shares have 10 “hold” ratings, three “sell” recommendations, and two “buy” calls, according to MarketWatch data. Transocean shares, meanwhile, are rated “hold” by seven analysts, while six recommend “buy” and five “sell.”