The UK’s Competition and Markets Authority (CMA) has said that SLB’s proposed $8bn acquisition of ChampionX may significantly reduce competition.
The merger could impact the supply of production chemical technologies to oil and gas exploration, development and production companies, the body said.
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The potential impacts were attributed to horizontal unilateral effects and vertical effects in directional drilling services and permanent downhole gauges.
The CMA initiated an investigation into the proposed acquisition in January this year. It had set a deadline of 27 March 2025 for its preliminary phase one decision.
As a result of the investigation, the CMA has declined to unconditionally clear SLB’s planned acquisition of ChampionX during its phase one review.
The parties have until 3 April 2025 to offer undertakings to address the substantial lessening of competition identified.
If no sufficient undertakings are offered, the CMA will refer the merger for an in-depth phase two investigation under the Enterprise Act 2002.
SLB and ChampionX announced their definitive agreement in April 2024, aiming to enhance customer value through industry expertise and digital integration.
The CMA has jurisdiction to review the merger as it creates a relevant merger situation, with both companies ceasing to be distinct and meeting the share of supply test.
The competition regulator has reviewed a range of evidence including submissions from the parties, bidding data and constraints from other suppliers. It examined internal documents and gathered evidence from customers and competitors to understand the competitive landscape and the merger’s potential impact.
SLB said it is committed to working with the CMA to address concerns and is confident the transaction will be cleared. The company expects the transaction to close in the second or early third quarter of 2025.
