The portfolios of the two firms when combined is anticipated to propel customer value via deep industry expertise and digital integration, along with better equipment life and production optimisation while possibly generating pretax synergies of around $400m per year for SLB within the first three years after closing
ChampionX to be acquired by SLB. (Credit: Gerd Fahrenhorst/Wikimedia Commons)
US-based drilling contractor SLB has agreed to acquire Nasdaq-listed oilfield services company ChampionX in an all-stock deal worth $7.75bn.
The deal has been approved unanimously by ChampionX’s board of directors.
As per its terms, ChampionX’s shareholders will exchange each of their shares for 0.735 shares of SLB. Following the closing of the deal, ChampionX’s shareholders will own a stake of around 9% in the enlarged SLB.
ChampionX provides chemistry solutions, artificial lift systems, and highly engineered equipment and technologies. It helps companies around the world in the exploration and extraction of oil and gas with a focus on safety, efficiency, and sustainability.
Recently, ChampionX announced the acquisition of RMSpumptools from UK-based James Fisher and Sons for $110m. RMSpumptools is engaged in designing and manufacturing highly engineered mechanical and electrical solutions for complex artificial lift applications.
ChampionX president and CEO Soma Somasundaram said: “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 SLB, the production phase of oil and gas operations usually is made up of the majority of an asset’s life cycle from completion till decommissioning. This puts a premium on the ability of service providers to assist customers cope with challenges spanning across their production system, said the company.
SLB also stated that at the same time, there is an increasing demand for scaling artificial intelligence (AI), autonomous operations, and other emerging technologies across operations around the world.
The portfolios of the two firms when combined is anticipated to propel customer value via deep industry expertise and digital integration, along with better equipment life and production optimisation.
SLB CEO Olivier Le Peuch said: “Our customers are seeking to maximise their assets while improving efficiency in the production and reservoir recovery phase of their operations.
“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.”
The deal is expected to generate pretax synergies of around $400m per year for SLB within the first three years after closing. This will be from growth in revenue and cost savings.
Likely to close by the year end, the transaction is contingent on ChampionX’s shareholders’ approval, regulatory approvals, and other customary conditions.