SLB has agreed the purchase of ChampionX in an all-stock transaction, strengthening its position in oilfield servicing market.
Under the terms of the agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock in exchange for each ChampionX share. At the closing of the transaction ChampionX shareholders will own approximately 9% of SLB’s outstanding shares of common stock.
According to SLB, its acquisition of ChampionX comes at an important time in the industry. The production phase of oil and gas operations typically comprises the majority of an asset’s life cycle from completion through decommissioning.
This places a premium on service providers’ ability to help customers address challenges across the entirety of their production system. At the same time, there is growing demand to scale emerging technologies such as AI and autonomous operations across global operations.
SLB 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. It is anticipated that the closing of the transaction will occur before the end of 2024.
“Our customers are seeking to maximize 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,” said Olivier Le Peuch, SLB’s chief executive officer.
“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,” added Soma Somasundaram, president and CEO of ChampionX.