SLB, an oilfield services company, has announced a definitive agreement to acquire its competitor ChampionX in an all-stock transaction.
The deal is valued at $7.75bn, according to a Reuters report.
This deal, which has received unanimous approval from ChampionX's board of directors, will see ChampionX shareholders receive 0.735 shares of SLB common stock for each ChampionX share they own.
Upon completion, ChampionX shareholders will hold approximately 9% of SLB's outstanding shares of common stock.
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 life cycle, 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.
“Our core strategy remains centred on meeting growing energy demand while accelerating decarbonisation and emissions reduction through innovation, scale and digitalisation in our core oil and gas business. This acquisition will expand SLB’s presence in the less cyclical and growing production and recovery space that is closely aligned with our returns-focused, capital-light strategy.”
ChampionX president and CEO Soma Somasundaram said: “Today’s announcement marks the start of an exciting next chapter for 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."
SLB anticipates annual pretax synergies of around $400m within the first three years post-closing, driven by revenue growth and cost savings. The transaction is contingent upon ChampionX shareholder approval, regulatory clearances and other standard closing conditions, with an expected completion before the end of 2024.
In addition to the acquisition news, SLB has revealed plans to return $7bn to shareholders over the next two years, with a target of $3bn for 2024 and $4bn for 2025. Le Peuch highlighted this commitment as a testament to the company's confidence in the transaction's value creation and its ability to continue generating robust cash flow.
