SLB Acquires ChampionX in All-Stock Deal Worth $5.2 Billion
Highlights
- Schlumberger Limited (SLB) has announced plans to acquire ChampionX in an all-stock transaction, which has been approved by ChampionX’s board of directors.
- Under the agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock for each ChampionX share, resulting in approximately 9% ownership of Schlumberger Limited’s outstanding shares for ChampionX shareholders.
- The acquisition, expected to close by the end of 2024 pending regulatory approvals, marks a strategic move for Schlumberger Limited, enhancing its position in the production and recovery space amidst growing demand for integrated solutions and emerging technologies.
SLB has announced that it will acquire ChampionX in an all-stock transaction. The acquisition has been approved by the board of directors of ChampionX.
Under the terms of the agreement, ChampionX shareholders will receive 0.735 shares of the Schlumberger Limited common stock in exchange for each ChampionX share.
At the closing of the transaction, ChampionX shareholders will own approximately 9% of Schlumberger Limited‘s outstanding shares of common stock.
The acquisition is expected to close before the end of 2024, subject to regulatory approvals and other customary closing conditions.
SLB’s acquisition of ChampionX comes at a critical time in the industry. The production phase of oil and gas operations typically comprises the majority of an asset’s life cycle from completion through decommissioning.
This places a premium on service providers’ ability to help customers address challenges across the entirety of their production system.
At the same time, there is growing demand to scale emerging technologies such as AI and autonomous operations across global operations.
Schlumberger Limited‘s ‘s CEO, Olivier Le Peuch, stated that the acquisition presents a significant opportunity for service providers who can partner with customers throughout the entire production lifecycle, offering integrated solutions and delivering differentiated value.
The combination of ChampionX’s strong production-focused leadership throughout North America and beyond with SLB’s international presence, unmatched technology portfolio, and history of innovation will drive tremendous value for customers and stakeholders.
Soma Somasundaram, President and CEO of ChampionX, said that becoming part of Schlumberger Limited will give ChampionX a much broader portfolio and the resources and reach to continue to lead the industry in providing energy to the world in an economically and environmentally sustainable way.
According to WSJ, the acquisition will expand SLB’s presence in the less cyclical and growing production and recovery space that is closely aligned with SLB’s returns-focused, capital-light strategy.
SLB expects to realize annual pretax synergies of approximately $400 million within the first three years post-closing through revenue growth and cost savings. Schlumberger Limited also announced that it will return $7 billion to shareholders over the next two years.
SLB will increase its 2024 shareholder returns to a target of $3 billion as well as set a target for 2025 shareholder returns of $4 billion.
The combination of Schlumberger Limited and ChampionX is expected to create significant value for shareholders of both companies, given the complementary nature of the respective portfolios.
The acquisition will also provide compelling value creation and the opportunity to share in significant upside from the realization of synergies, including accelerated growth opportunities.
