23 paragraphs in Risk Factors of the 10-K filed Feb 20, 2026
with nothing like them in the 10-K filed Feb 20, 2025. Quoted exactly.
Paragraphs that were only edited are under 10-K change.
Our pending Business Combination may be delayed or not occur at all for a variety of reasons, some of which are outside of the parties’ control, and if these conditions are not satisfied, the Business Combination Agreement may be terminated and the Business Combination may not be completed.
On February 9, 2026, Valaris and Transocean (Valaris and Transocean, collectively, the “Parties” and each, a “Party”), entered into a business combination agreement (the “Business Combination Agreement”), providing for the combination of the two Parties (the “Business Combination”). Pursuant to the Business Combination Agreement, and on the terms and subject to the conditions thereof, Transocean will acquire all of the issued and outstanding common shares of Valaris in exchange for shares of Transocean at an exchange ratio of 15.235 Transocean shares for each Valaris share. The Business Combination will be effected by way of a court-approved scheme of arrangement between Valaris and the holders of the Valaris shares pursuant to section 99 of the Companies Act 1981 of Bermuda, as amended. Following the consummation of the Business Combination, Transocean’s existing shareholders and Valaris’ existing shareholders will own approximately 53% and 47%, respectively, of the combined company on a fully diluted basis assuming conversion to shares of Transocean’s exchangeable bonds due 2029.
Completion of the Business Combination is subject to customary closing conditions, including (1) the receipt of the requisite approvals of the Valaris shareholders and the Transocean shareholders, (2) the granting of the sanction order on terms consistent with the Business Combination Agreement, (3) the Transocean shares issued pursuant to the Business Combination Agreement having been approved for listing on the NYSE, (4) certain regulatory approvals having been obtained or any applicable waiting period having expired or been terminated, (5) no governmental authority within applicable jurisdictions having enacted or issued any law or order preventing or prohibiting the consummation of the Business Combination and (6) the absence of a Transocean Material Adverse Effect or a Valaris Material Adverse Effect (as each are defined in the Business Combination Agreement). Therefore, the Business Combination Agreement may not be completed or may not be completed as timely as expected.
In addition, the Business Combination Agreement also contains certain customary termination rights in favor of each Party, including for the failure to receive the requisite approvals of the Valaris shareholders and Transocean shareholders. A Party may terminate the Business Combination Agreement, prior to the receipt of the requisite approval of the other Party’s shareholders, if the other Party shall have made an Adverse Recommendation Change (as defined in the Business Combination Agreement). Either Valaris or Transocean may terminate the Business Combination Agreement if the effective time shall not have occurred on or prior to February 9, 2027 (as such date may be extended in accordance with the terms of the Business Combination Agreement).
Failure to complete the Business Combination could adversely affect our business and the market price of our common shares in a number of ways, including:
•The market price of our common shares may decline to the extent that the current market price reflects an assumption that the Business Combination will be consummated;
•If the Business Combination Agreement is terminated under certain circumstances specified in the Business Combination Agreement, we would be required to pay a termination fee of approximately $173.0 million to Transocean, and in other specified circumstances where the Business Combination Agreement is terminated following the failure to obtain the requisite shareholder approval and the above referenced termination fee is not otherwise payable, if Valaris shareholders failed to approve the transactions contemplated by the Business Combination Agreement, Valaris will be required to reimburse Transocean’s transaction expenses up to $58 million;
•We have incurred, and will continue to incur, significant expenses for professional services in connection with the Business Combination Agreement for which we will have received little or no benefit if the Business Combination Agreement is not consummated; and
•A failed Business Combination Agreement may result in negative publicity and/or give a negative impression of us in the investment community, with our customers and our other stakeholders.
Efforts to complete the Business Combination could disrupt our relationships with third parties and employees, divert management’s attention, or result in negative publicity or legal proceedings, any of which could negatively impact our operating results and ongoing business.
We have expended, and continue to expend, significant management time and resources in an effort to complete the Business Combination, which may have a negative impact on our ongoing business and operations. Uncertainty regarding the outcome of the Business Combination and our future could disrupt our business relationships with our existing and potential customers, suppliers and other business partners, who may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than us, or terminate or amend contracts. Uncertainty regarding the outcome of the Business Combination could also adversely affect our ability to recruit and retain key personnel and other employees. The pendency of the Business Combination may also result in negative publicity and a negative impression of us in the financial markets, and may lead to litigation against us and our directors and officers. Such litigation could be distracting to management and, may, in the future, require us to incur significant costs. Such litigation could result in the Business Combination being delayed and/or enjoined by a court of competent jurisdiction, which could prevent the Business Combination from becoming effective. The occurrence of any of these events individually or in combination could have a material and adverse effect on our business, financial condition and results of operations.
The Business Combination Agreement contains provisions that limit our ability to pursue alternatives to the Business Combination which could discourage a potential competing acquiror from making an alternative transaction proposal.
The Business Combination Agreement contains provisions that subject Valaris to certain restrictions on its ability to solicit an alternative acquisition proposal from third parties, to provide non-public information to third parties and to engage in discussions with third parties regarding alternative acquisition proposals, subject to customary exceptions. Each Party is required to call a meeting of its shareholders to obtain the required approval of such Party’s shareholders described above and, subject to certain exceptions, to recommend that their respective shareholders approve such proposals. Neither Party has the ability to terminate to accept a Superior Proposal (as defined in the Business Combination Agreement).
Additionally, if the Business Combination Agreement is terminated and we determine to seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Business Combination.
While the Business Combination Agreement is in effect, we are subject to restrictions on our business activities.
The Business Combination Agreement generally requires us to operate our business in the ordinary course consistent with past practices. It also imposes customary interim operating covenants that restrict us from taking specified actions, subject to certain exceptions, until the Business Combination is completed or until the Business Combination Agreement is terminated, including, but not limited to, our ability to amend our organizational documents; declare dividends or repurchase shares; encumber assets; make acquisitions or dispositions; incur or guarantee indebtedness; enter into, or amend, any material contract.
