The US Department of Justice (DOJ) has cleared the proposed multi-billion dollar merger between Schlumberger and Cameron International without any conditions, both companies announced in a joint statement on Wednesday (18 November).
The clearance grants early termination of the waiting period required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
In late August, Schlumberger announced it would acquire Cameron for US$14.8 billion stock and cash deal. The agreement was unanimously approved by both boards of directors. The merger agreement offers Cameron shareholders 0.716 shares of Schlumberger common stock and a cash payment of $14.44 in exchange for each Cameron share.
The deal is still subject to approval by Cameron stockholders and a special meeting is scheduled for 17 December, where Cameron stockholders will consider and vote on the proposed merger plan. If approved, Schlumberger and Cameron expect to close the merger sometime in Q1 2016.
Schlumberger has had an easier time in its acquisition of Cameron than Halliburton’s US$34.6 billion takeover of Baker Hughes. The merger has not been met with open arms by federal regulators. And in late September, Halliburton and Baker Hughes announced they would divest further businesses to win approval from US Antitrust authorities. And the pair have also amended their timing agreement with the US DOJ with a three-week extension. Now, the earliest closing date is set for 15 December 2015; however, the agreement also provides that the closing can be extended into 2016, if necessary. The Halliburton-Baker merger has received unconditional regulatory clearances in Canada, Kazakhstan, South Africa, and Turkey.
At the time the Schlumberger-Cameron merger was announced Schlumberger’s chairman and CEO, Paal Kibsgaard had this to say: “This agreement with Cameron opens new and broader opportunities for Schlumberger. At our investor conference in June 2014, we highlighted how the E&P industry must transform to deliver increased performance at a time of range-bound commodity prices. With oil prices now at lower levels, oilfield services companies that deliver innovative technology and greater integration while improving efficiency, which our customers increasingly demand, will outperform the market.”
Schlumberger has been busy over the last several months. Earlier this week, the company announced it would acquire US-based Fluid Inclusion Technologies. In September, the company moved to add supermaterials company Novatek to its portfolio. The two previously worked together to create Schlumberger’s StingBlade conical diamond element drill bit, and the acquisition aims to improve Schlumberger’s drilling performance line.
However, it hasn’t been all roses for the company. In October, Schlumberger revealed its revenue took a 33% plunge in Q3 2015 with revenue hitting almost US$8.5 billion for the period. The company cited a decline in rig activity and pricing pressure as the reasons for the fall. The results are causing the company to also proceed with a further round of capacity and overhead reductions.
Kibsgaard said in a 16 October earnings call that more job cuts are to be expected in Q4 at his company, although he did not specify how many positions would be eliminated.
“Our forward visibility has again been reduced and we will consequently revert back to managing the company quarter-by-quarter,” Kibsgaard said during the October call. “This means a further round of capacity and overhead reductions in Q4 as we adjust resources to a lower activity outlook. At the same time, we will continue to accelerate our transformation program with the next step being a significant restructuring of our global manufacturing and distribution network, which will further modernize the core part of our company.”
Image: Schlumberger worker/Schlumberger
Read more
Subscribe
