Valaris (VAL) +15.7% pre-market Monday after Transocean (RIG) agreed to acquire the company in an all-stock deal valued at ~$5.8B, creating an offshore drilling industry leader with a fleet of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles and 31 modern jackups.
Under the deal terms, Valaris (VAL) shareholders will receive a fixed exchange ratio of 15.235 common shares of Transocean (RIG) stock for each Valaris common share; upon completion and on a fully diluted basis, Transocean shareholders will own ~53% of the combined company, with Valaris shareholders owning the remaining 47%.
Based on the most recent closing stock prices, the transaction implies a combined enterprise value of ~$17B.
Transocean (RIG) said the acquisition will unlock more than $200M in identified cost synergies, in addition to its ongoing cost-reduction program which is expected to reduce costs by more than $250M total through 2026.
Transocean’s (RIG) senior management team will be led by CEO Keelan Adamson, and Jeremy Thigpen will serve as Executive Chairman; the board will be comprised of nine current Transocean directors and two current Valaris (VAL) directors.