SLB will buy ChampionX for $7.74 billion in an all-stock deal that puts a 14.6% premium on ChampionX’s April 1 closing price. (Source: Shutterstock.com)
Editor's note: This is a breaking news item. Check back for updates.
SLB will buy ChampionX, a $6.76 billion market-cap oilfield service company, in an all-stock transaction that values the company at roughly $7.74 billion, or a premium of about 14.6%.
Under the terms of the agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock in exchange for each ChampionX share, SLB said in an April 2 press release.
At the end of trading on April 1, SLB stock closed at $55.22 and ChampionX at $35.40. Based on those prices, SLB’s deal prices ChampionX shares at about $40.58.
At the closing of the transaction, ChampionX shareholders will own approximately 9% of SLB’s outstanding shares of common stock.
SLB’s acquisition of ChampionX comes as oilfield service companies are witnessing a broad wave of consolidation among E&Ps and a greater emphasis on technical and software services. ChampionX and other service companies have been doing smaller-scale M&A.
In March, ChampionX announced the acquisition of artificial lift company RMSpumptools Ltd. from U.K.-based James Fisher and Sons Plc. That followed a February deal by the company to buy gas software company Artificial Lift Performance Ltd.
SLB said it expects to realize annual pretax synergies of approximately $400 million within the first three years post-closing through revenue growth and cost savings. The transaction is subject to ChampionX shareholders’ approval, regulatory approvals and other customary closing conditions.
“The production phase of oil and gas operations typically comprises the majority of an asset’s life cycle from completion through decommissioning,” SLB said in a press release. That places a premium on service providers’ ability to help customers address challenges while meeting demand to scale emerging technologies such as AI and autonomous operations across global operations.
“Our customers are seeking to maximize their assets while improving efficiency in the production and reservoir recovery phase of their operations,” SLB CEO Olivier Le Peuch. “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.”
Le Peuch said SLB’s core strategy remains centered on meeting growing energy demand while accelerating decarbonization and emissions reduction its 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,“ Le Peuch said.
Soma Somasundaram, president and CEO of ChampionX, said the company has been on a journey to build the best production-focused company in our sector while unlocking energy through differentiated products and technology.
“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,” Somasundaram said.
The transaction is anticipated to close before the end of 2024.
SLB also said in the press release that will return $7 billion to shareholders over the next two years. The company will increase its 2024 shareholder returns to a target of $3 billion and aim for returning $4 billion in 2025.
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