Oil giant SLB closes deal to buy rival ChampionX for $7.7 billion – Companies

SLB, the world’s largest provider of oilfield services, will acquire 100% of the capital of North American rival ChampionX, in a deal valued at 7.75 billion dollars (7.21 billion euros), according to Reuters.

When the transaction is completed, ChampionX shareholders will own approximately 9% of SLB’s outstanding shares, according to a statement from SLB, released this Tuesday, April 2. For the purposes of the transaction, each North American share is valued at $40.59, a premium of 14.6% compared to the price recorded at the close of the previous day’s session, according to Reuters accounts.

The purchase comes at a time when oil shale fields are aging, which is causing US drilling companies to look for more developed technologies to maintain the pace of production.

With this acquisition, which they expect to be completed before the end of the year, SLB will expand its artificial lift technology – which helps maintain the flow of production from older wells. The company already dominates this market (with 21%) and, adding ChampionX, will increase its share by 5%, according to data collected by Bloomberg.

The former French company, known as Schlumberger until selling the business to the US in 2020, wants to consolidate its presence in the US oil sector and establish a presence in oil and gas production and recovery – which it claims is less cyclical than the initial phase of drilling – as well as expanding the use of Artificial Intelligence techniques in the sector, he writes in the statement.

“Our customers seek to maximize their assets and, at the same time, improve efficiency in the production and reservoir recovery phase of their operations,” said SLB CEO Olivier Le Peuch. He added: “This represents a significant opportunity for service providers who can partner with customers throughout the entire production lifecycle.”

Present in more than a hundred countries, the oil services giant announced that it will return seven billion dollars (6.5 billion euros) to shareholders over the next two years and increase returns in 2024, for a target of three billion dollars (2.8 billion euros). It also wants to reach an EBIDTA of 400 million dollars (371 million euros) in the first three years after closing the deal.

In the space of a week, this is SLB’s second purchase and the largest since 2016, when it added oilfield gear manufacturer Cameron International to its portfolio for US$14.8 billion (€13.7 billion). ).

On the stock market, the acquisition has already had an impact: SLB shares fell 0.4%, while ChampionX rose more than 12%.

*News edited by Inês Santinhos Gonçalves