Offshore drilling services provider Transocean is taking over Valaris Limited, a rig fleet operator of ultra-deepwater drillships, versatile semisubmersibles and shallow-water jackups.

Transocean and Valaris inked a definitive agreement to combine the two companies under which Transocean will acquire Valaris in an all-stock transaction valued at approximately $5.8bln.

The companies said the deal will expand their reach and customer access in the world’s most attractive offshore basins.

“The powerful combination is well-timed to capitalize on an emerging, multi-year offshore drilling upcycle,” said Transocean president and chief executive officer Keelan Adamson. “We have identified more than $200 million in cost synergies that will complement our ongoing efforts to safely lower costs,” Adamson added.

The combined firm will have an enterprise value of around $17bln and will own a diversified offshore fleet of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles and 31 jackups.

Upon completion and on a fully diluted basis, Transocean shareholders will own approximately 53% of the combined company, with Valaris shareholders owning the remaining 47%.

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 common share of Valaris.

The deal is expected to close in the second half of the year, subject to regulatory approvals and customary closing conditions, and approvals by the shareholders of each company.

Transocean’s senior management team will be led by chief executive Keelan Adamson, and Jeremy Thigpen will serve as executive chairman of the board. The board will be comprised of nine current Transocean directors and two current Valaris directors.

Transocean will remain incorporated in Switzerland, with its primary administrative office in Houston.