Brazil clears Transocean's roughly $5.8 billion acquisition of Valaris without restrictions
Key Facts
Brazil's competition authority approved Transocean's acquisition of Valaris on October 13, 2026, in an all-stock deal the companies said was valued at approximately $5.8 billion. Transocean said in a filing with the U.S. Securities and Exchange Commission that the decision allows the merger to proceed "without restrictions." The approval becomes final after a 15-day waiting period beginning with publication of the decision in Brazil's official gazette. The companies had expected publication on October 15 or 16, 2026, which would trigger the start of that period. Once the decision becomes final, all regulatory approval conditions required for closing will have been satisfied, according to the filing, with other closing conditions remaining.
The merger agreement sets the consideration for Valaris shareholders at an exchange ratio of 15.235 Transocean shares for each share they own, according to Valaris' filing on the agreement's terms. The consideration is therefore tied to the acquiring company's share performance under the exchange structure agreed by the parties. Valaris said in deal communications that these terms represented a premium of 31.6% based on closing share prices on February 6, 2026. That comparison relates to the reference prices used when the deal was announced, while the agreement determines the number of shares shareholders of the target company will receive. The companies expected Transocean shareholders to own approximately 53% of the combined entity and Valaris shareholders 47% upon completion.
On operations, the companies estimated in the deal announcement that the combined fleet would comprise 73 offshore drilling rigs, expanding the range of assets available to customers. Transocean's investor presentation included more than $200 million in merger-related cost savings among the targeted benefits of combining the companies. The company expected to achieve those savings as a result of the deal, as part of its stated financial rationale. On debt, Transocean targeted a leverage ratio of approximately 1.5 times within 24 months of closing, according to the presentation filed with the U.S. Securities and Exchange Commission. That timeline is tied to completion of the acquisition, as the company specified that the period would begin at closing when presenting its financial target to investors.
The companies also cited an estimated combined contract backlog of approximately $10 billion in their merger rationale, according to the original deal presentation to investors. They presented that backlog as part of the operational backdrop for the planned entity, alongside its fleet diversity and the benefits of combining their offshore drilling businesses. In a subsequent operational development, Transocean said in a filing dated October 9, 2026, that the contract value of its agreement with Equinor was now included in its firm backlog. The company put the agreement's total value at approximately $1.0 billion in the filing with the U.S. Securities and Exchange Commission. Confirmation that the agreement had been included in Transocean's backlog came before the Brazilian competition authority's merger decision.
The Brazilian decision followed the closure of the U.S. antitrust investigation, with the U.S. Department of Justice notifying the companies of that step on September 30, 2026, according to a Valaris filing. The company said in the filing that the waiting period under the Hart-Scott-Rodino Act had expired as part of the acquisition's regulatory process. In the historical market reaction to the original deal announcement, both companies' shares posted gains, according to reporting by the Associated Press at the time. The agency said Transocean shares reversed an early loss during the session in which the acquisition was announced and then rose 5.9%. Valaris shares jumped 34.3% in that session as the companies announced the exchange terms agreed for the acquisition.
The companies expect to complete the merger in the fourth quarter of 2026, according to Transocean's filing on the Brazilian decision and progress toward completing the deal. That timing remains subject to the satisfaction or waiver of the remaining closing conditions, according to the filing with the U.S. regulator. For its next earnings release, Valaris said it would report results for the third quarter of 2026 after the market close on November 2, 2026. The company said in its earnings date announcement that it does not intend to hold future earnings calls because of the pending merger with Transocean. It added that it does not intend to provide guidance updates, setting out its financial reporting arrangements for the period ahead of the expected merger completion.