BY Richard Summerfield
SLB has agreed to acquire rival oilfield service provider ChampionX Corporation for $7.8bn in an all-stock deal which will bolster SLB’s technology portfolio.
Under the terms of the agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock in exchange for each ChampionX share held. At the closing of the transaction, ChampionX shareholders will own approximately 9 percent of SLB’s outstanding shares of common stock.
The transaction is subject to ChampionX shareholders’ approval, regulatory approvals and other customary closing conditions. Closing of the transaction is expected to occur before the end of 2024.
“Our customers are seeking to maximize their assets while improving efficiency in the production and reservoir recovery phase of their operations,” said Olivier Le Peuch, chief executive of SLB. “This 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 our own international presence, unmatched technology portfolio, and history of innovation will drive tremendous value for our customers and stakeholders.”
“Today’s announcement marks the start of an exciting next chapter for ChampionX,” said Soma Somasundaram, president and chief executive of ChampionX. “We have been on a journey to build the best production-focused company in our sector, with a goal of unlocking energy through our differentiated products and technology as well as our strong financial engine. Becoming part of SLB will give us 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. Our companies share a vision for the future of energy that leverages technology and innovation to solve our customers’ most complex problems and better serve the communities in which we operate.”
According to a statement announcing the deal, SLB expects to realise annual pre-tax synergies of approximately $400m within the first three years post-closing through revenue growth and cost savings.
The company has also announced plans to return $7bn to shareholders over the next two years. SLB will increase its 2024 shareholder returns to a target of $3bn as well as set a target for 2025 shareholder returns of $4bn. Last week, SLB announced it had agreed to combine its carbon capture business with Aker Carbon Capture in a $379.67m deal. SLB will own 80 percent of that combined business.
News: SLB to buy ChampionX for $8 billion in growing deal-making in US energy sector