**Possible Final Merger in Offshore Drilling Rig Market: Analysts Weigh In**
The offshore drilling industry has witnessed a decade of intensive mergers and acquisitions (M&A), largely driven by the “Big 3” offshore drilling companies: Transocean, Noble (now part of Maersk Drilling), and Valaris, as highlighted by Evercore ISI in its latest Offshore Rig Market Snapshot. The “Big 3” have been instrumental in reshaping the industry through strategic acquisitions.
Transocean’s significant moves include acquiring Aker Drilling in 2011, Songa Offshore in 2018, and Ocean Rig also in 2018. These acquisitions have bolstered Transocean’s position as a leader in ultra-deepwater and harsh environment drilling. Valaris has also been actively pursuing accretive transactions, acquiring Pride International in 2011, Atwood Oceanics in 2017, and Rowan Companies in 2019. Noble Oil has made notable purchases, including Frontier Drilling for $2.16 billion cash in 2010 and Pacific Drilling in 2021. Additionally, Noble merged with Maersk Drilling in 2022, integrating Diamond Offshore and expanding its fleet portfolio by approximately 12 offshore floaters.
Despite the extensive consolidation in recent years, Evercore ISI suggests that there might be one more significant merger remaining in the offshore drilling space. This potential deal could further enhance the pricing power of offshore drillers, boost earnings, realize efficiencies, and help deflate debt levels. M&A discussions continue to be a topic of interest among CEOs and during earnings calls. For instance, Simon Johnson, CEO of Seadrill, announced at a recent investor conference in Norway that Seadrill is actively exploring asset acquisitions or potential mergers with peers. The company is open to acquiring distressed assets or competitors with challenged balance sheets.
However, not all players feel compelled to engage in M&A activity. For example, Anton Dibowitz, CEO of Valaris, has stated that his company does not need mergers to maintain its position in the offshore drilling business. Despite this stance, Valaris remains committed to exploring strategic M&A opportunities that are accretive to shareholder value. Furthermore, CEOs like Jeremy Thigpen of Transocean and Patrick Schorn of Borr Drilling are focused on generating free cash flow and deleveraging, but they are also open