RIG Transocean Ltd

Item 1.01 Entry into a Material Definitive Agreement.

Merger Agreement

On September 3, 2018, Transocean Ltd. (“ Transocean ”), Transocean Oceanus Holdings Limited, a newly formed, direct, wholly owned subsidiary of Transocean (“ HoldCo ”), and Transocean Oceanus Limited, a newly formed, indirect, wholly owned subsidiary of Transocean (“ Merger Sub ”), entered into an agreement and plan of merger (the “ Merger Agreement ”) with Ocean Rig UDW Inc. (“ Ocean Rig ”).  The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Ocean Rig, with Ocean Rig surviving the merger as an indirect, wholly owned subsidiary of Transocean (the “ Merger ”). The Merger Agreement was unanimously approved by the board of directors of each of Transocean and Ocean Rig.

Upon completion of the Merger, each issued and outstanding share of Ocean Rig immediately prior to the Merger will be converted into the right to receive 1.6128 newly issued shares of Transocean and $12.75 in cash (the “ Merger Consideration ”).

The Merger Agreement contains customary representations and warranties by Transocean and Ocean Rig, and each of Transocean and Ocean Rig has agreed to various customary covenants and agreements, including covenants to conduct its respective business in the ordinary course and in accordance with past practice and applicable laws prior to the closing of the Merger. As part of the Merger Agreement, Ocean Rig has also agreed not to (i) solicit proposals relating to certain alternative transactions or (ii) enter into discussions or negotiations or provide non-public information in connection with any proposal for an alternative transaction from a third party, subject to certain exceptions to permit Ocean Rig’s board of directors to comply with its fiduciary duties. Notwithstanding this “no-shop” restriction, prior to obtaining Ocean Rig shareholder approval, under specified circumstances, Ocean Rig’s board of directors may change its recommendation and terminate the Merger Agreement, upon payment of the termination fee described below, in order to enter into an agreement with respect to a superior proposal. Ocean Rig has agreed to convene and hold a meeting of shareholders to vote on the Merger even if its board of directors changes its recommendation.

The completion of the Merger is subject to the satisfaction of customary closing conditions, including that (1) the Ocean Rig shareholders have approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement; (2) the Transocean shareholders have approved the issuance of the Transocean shares in connection with the Merger; (3) the absence of a material adverse effect on either Transocean or Ocean Rig; (4) the Management Services Agreements between Ocean Rig or its subsidiaries and TMS Offshore Services Ltd., a company that may be deemed to be beneficially owned by the Chairman of the board of directors of Ocean Rig, have been terminated; (5) the Authorized Capital Increase (as defined below), the Parent Share Issuance (as defined below) and related amendments to Transocean’s articles of association in connection therewith have been registered with the commercial register in the Canton of Zug, Switzerland; and (6) the shares to be issued by Transocean in connection with the Merger shall have been approved for listing on the New York Stock Exchange. The completion of the Merger is not conditioned on receipt of financing by Transocean.

The Merger Agreement may be terminated under certain circumstances, including (in each case subject to certain exceptions) if (i) the Merger has not been consummated on or before March 31, 2019, subject to extension up to September 3, 2019 in the event that the antitrust-related conditions to the closing of the Merger have not been satisfied or waived (the “ End Date ”); (ii) a final and non-appealable order is entered enjoining the Merger; (iii) Ocean Rig shareholders fail to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement; (iv) Transocean shareholders fail to approve the Authorized Capital Increase, the Share Issuance or the related amendments to Transocean’s articles of association contemplated by the Merger Agreement; (iv) by Transocean if Ocean Rig’s board of directors changes its recommendation or fails to reaffirm or confirm publicly its recommendation following the public announcement of an acquisition proposal (as defined in the Merger Agreement); (vi) by Ocean Rig prior to obtaining Ocean Rig shareholder approval, if Ocean Rig enters into an agreement with respect to a superior proposal, subject to payment of the termination fee described below; (vii) by Transocean if Ocean Rig commits a willful breach of any of its obligations under the “no-shop” restrictions discussed above, its obligations to hold its shareholder meeting or its obligations with regard to the content of the joint proxy statement/prospectus to be filed in connection with the acquisition following a change in the recommendation of its board of directors; or (viii) there is a material breach by the other party

of any of such other party’s obligations under the Merger Agreement, and such condition is incapable of being cured by the End Date.

Upon termination of the Merger Agreement under specified circumstances, including (i) a termination by Ocean Rig to enter into an agreement for an alternative transaction in connection with a superior proposal that did not result from a willful breach of the non-solicitation provisions, (ii) termination by Transocean following a change of recommendation by the board of directors of Ocean Rig, or (iii) a termination resulting from willful breach by Ocean Rig of its obligations under the non-solicitation, shareholder meeting or proxy statement provisions, Ocean Rig would be required to pay Transocean a termination fee of $90,000,000 (the “ Termination Fee ”). Under certain additional circumstances described in the Merger Agreement, Ocean Rig must also pay Transocean the Termination Fee if the Merger Agreement is terminated, a competing acquisition proposal has previously been publicly made and not publicly withdrawn, and the Company enters into an agreement for an alternative change of control transaction that is subsequently consummated within 12 months following such termination.

Under certain other circumstances, Transocean is required to pay to Ocean Rig a termination fee of $132,500,000 in the case of a failure to obtain required antitrust clearances prior to the End Date, and to reimburse Ocean Rig in the amount of $60,000,000, representing a reasonable estimate of Ocean Rig’s expenses, if the Merger Agreement is terminated due to a failure to obtain Transocean shareholder approval.

A copy of the Merger Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement. The Merger Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about Transocean or Ocean Rig. In particular, the assertions embodied in the representations and warranties in the Merger Agreement were made as of a specified date, are modified or qualified by information in confidential disclosure letters provided by each party to the other in connection with the signing of the Merger Agreement, may be subject to a contractual standard of materiality different from what might be viewed as material to shareholders, or may have been used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the Merger Agreement are not necessarily characterizations of the actual state of facts about Transocean or Ocean Rig at the time they were made or otherwise and should only be read in conjunction with the other information that Transocean makes publicly available in reports, statements and other documents filed with the U.S. Securities and Exchange Commission (“ SEC ”).

Voting and Support Agreements

Concurrent with the execution of the Merger Agreement, and as a condition to Transocean’s willingness to enter into the Merger Agreement, certain shareholders of Ocean Rig, including all of its directors that own shares of Ocean Rig, entered into separate voting and support agreements with Transocean (each, a “ Company Voting Agreement ”).

Based on the information provided by the shareholders, as of September 3, 2018, the Ocean Rig shareholders party to Company Voting Agreements beneficially owned in the aggregate approximately 43.8 million Ocean Rig shares, representing approximately 47.9% of the outstanding Ocean Rig shares (based on the total number of outstanding Class A common shares and Class B common shares taken together as one class, as of September 3, 2018).

In addition, concurrent with the execution of the Merger Agreement, and as a condition to Ocean Rig’s willingness to enter into the Merger Agreement, one of Transocean’s shareholders entered into a voting and support agreement with Ocean Rig (the “ Parent Voting Agreement ”).  Based on the information provided by the shareholder, as of September 3, 2018, the Transocean shareholder party to the Parent Voting Agreement beneficially owned in the aggregate approximately 33.1 million Transocean shares (excluding the shares of Transocean that are issuable upon the exchange of exchangeable bonds issued by Transocean affiliates) , representing approximately 7.2% of the outstanding Transocean shares as of July 31, 2018.

Pursuant to the Company Voting Agreements, at any meeting of Ocean Rig shareholders at which the approval and adoption of the Merger Agreement and the other transactions contemplated by the Merger Agreement is to be voted upon,

each of the shareholders party to the Company Voting Agreements has agreed to be present (in person or by proxy) and vote, or give written consent covering, all of its Ocean Rig shares in the following manner, among others:

In addition, each shareholder party to a Company Voting Agreement or the Parent Voting Agreement agreed to vote all shares of Transocean that such shareholder beneficially owns (subject to certain limited exceptions in the case of the shareholder party to the Parent Voting Agreement) in favor of the following proposals at any meeting of Transocean’s shareholders held to approve the obtain the Transocean shareholder approvals necessary to consummate the Merger:

The voting agreements also contain certain restrictions on the transfer of Transocean and Ocean Rig shares.  In particular, the Company Voting Agreements and the Parent Voting Agreement prohibit each shareholder party thereto from transferring any of such shareholder’s Ocean Rig shares and Transocean shares (as applicable), subject to certain limited exceptions, prior to the time when the Ocean Rig and Transocean shareholder approvals necessary to consummate the Merger have been obtained.

The voting agreements and all obligations thereunder terminate, if, among other things, the Merger Agreement is terminated in accordance with its terms, or if the board of directors of Ocean Rig fails to make, withdraws or modifies in a manner adverse to Transocean its recommendation (or recommends an alternative acquisition proposal or takes any action or makes any statement inconsistent with its recommendation) following the receipt of a superior proposal.