Offshore drilling contractors Transocean Ltd. (RIG) and Valaris (VAL) have advanced another crucial step toward combining operations, after the U.S. Department of Justice granted antitrust approval for Transocean's proposed acquisition of Valaris. The offshore drilling company disclosed the clearance through an 8-K filing on Wednesday, removing the final U.S. regulatory hurdle for the transaction.

The DOJ's antitrust division approved the deal as part of the standard Hart-Scott-Rodino examination process, the pre-merger review used to assess potential antitrust concerns, and that regulatory evaluation period has now concluded. Under that framework, the conclusion of the review allows the companies to lawfully proceed with the transaction in the United States, marking a significant regulatory milestone for the agreement.

Under the terms of the merger, first announced on February 9, 2026, Transocean will exchange 15.235 of its shares for each outstanding Valaris share. The transaction is structured entirely as a stock swap, carries an estimated value of $5.8 billion, and involves no cash consideration — meaning Valaris shareholders who participate would receive Transocean stock rather than a cash payout.

Following the announcement, Valaris shares experienced modest gains, climbing approximately 0.09% during the trading session — a movement that suggested market participants viewed the deal as progressing smoothly toward completion.

One Approval Remains

Having obtained U.S. regulatory approval, a single significant obstacle remains. Brazil's Administrative Council for Economic Defense must still provide its authorization. CADE initiated its official examination of the transaction on August 7, and its consent represents the final regulatory requirement before the deal can proceed to a closing. As Brazil's competition authority, CADE is conducting the same category of antitrust assessment for its jurisdiction that the DOJ has now completed for the United States.

Transocean and Valaris maintain their expectation that the merger will conclude during the fourth quarter of 2026, a projected timeframe that remains unchanged following the DOJ approval. Market observers had anticipated this development, with CTFN indicating last Monday that DOJ clearance was likely imminent.

Market Context

The transaction unites two industry leaders in offshore contract drilling operations. Valaris maintains a portfolio of mobile offshore drilling platforms serving oil and gas companies globally, while Transocean operates in the identical sector, making this a consolidation of two direct competitors. The resulting combined fleet would constitute a substantial portion of the global offshore drilling capacity.

Wall Street analysts tracking Valaris shares have assigned a Hold consensus rating, and the current average price objective stands at $80.00. Valaris maintains a market capitalization of approximately $5.45 billion, and daily trading volume typically averages around 1,087,317 shares.

A technical sentiment indicator for VAL currently shows a Buy signal. However, other underlying metrics present a more nuanced picture. The company has demonstrated robust profitability metrics and solid return on equity figures in recent reporting periods, and its valuation multiple has also appeared favorable to industry competitors.

Conversely, free cash flow generation has been negative over the trailing twelve-month period. Several technical indicators, including the MACD, have also displayed bearish signals lately, and Valaris shares have recently traded beneath several important moving average levels. This pattern has contributed to divided opinions among market observers monitoring the stock.

For now, the merger timeline continues advancing toward a fourth-quarter completion. The critical remaining event is CADE's regulatory determination from Brazil.

This article originally appeared on Blockonomi.