Transocean is set to absorb rival offshore driller Valaris in a move that reshapes the upper end of the global rig market and adds fresh momentum to an already busy consolidation cycle.

The Switzerland-based offshore drilling heavyweight said it has signed a definitive agreement to acquire US-listed Valaris in an all-stock transaction valued at about $5.8bn. On a fully diluted basis, Transocean shareholders will own roughly 53% of the combined group, with Valaris investors holding the remaining 47%.

The deal creates a drilling contractor with an enterprise value of around $17bn and a fleet of 73 rigs, spanning 33 ultra-deepwater drillships, nine semisubmersibles and 31 modern jackups. The combined company will rank among the largest and most diversified offshore drillers globally, with exposure across deepwater, harsh-environment and shallow-water markets.

Transocean said the transaction will unlock more than $200m in identified cost synergies, on top of its existing cost-reduction programme, which is expected to deliver more than $250m in savings through 2026. The enlarged group will also carry a combined backlog of about $10bn, providing longer-term cash flow visibility.

Management sees the timing as favourable, with offshore activity firming across key basins and utilisation tightening for high-specification rigs. The merged company is expected to generate stronger cash flow, accelerate debt reduction and bring leverage down to around 1.5x within two years of closing.

Valaris chief executive Anton Dibowitz said the tie-up brings together two highly complementary fleets, pairing Transocean’s deepwater focus with Valaris’ jackup strength. The combination, he said, creates a contractor capable of working “at any water depth in any offshore environment”.

Transocean’s senior leadership team will remain in place, with Keelan Adamson continuing as chief executive and Jeremy Thigpen serving as executive chairman. The board will comprise nine Transocean directors and two from Valaris. The company will stay incorporated in Switzerland, with Houston remaining its main administrative base.

Under the agreed exchange ratio, Valaris shareholders will receive 15.235 Transocean shares for each Valaris share. The deal has been unanimously approved by both boards and is expected to close in the second half of 2026, subject to regulatory and shareholder approvals.

The announcement adds another chapter to a wave of offshore drilling consolidation seen over the past five years, as contractors seek scale, lower leverage and stronger pricing power after a long downturn. Recent combinations include Noble’s tie-ups with Pacific Drilling, Maersk Drilling and Diamond Offshore, as well as ADES’ move to bulk up its jackup fleet. If completed, the Transocean–Valaris merger would stand as one of the sector’s most significant tie-ups since the post-pandemic recovery began.