SLB and oil field services company, ChampionX Corporation have entered a definitive agreement for SLB to acquire ChampionX in an all-stock transaction, approved by ChampionX’s board of directors.
According to the agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock for each ChampionX share, resulting in ChampionX shareholders owning approximately 9% of SLB’s outstanding common stock post-transaction.
SLB’s 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, the company stated in a press release on Tuesday.
“Our customers are seeking to maximize their assets while improving efficiency in the production and reservoir recovery phase of their operations,” Olivier Le Peuch, SLB’s chief executive officer, said. “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,” he added.
ChampionX’s President and CEO, Soma Somasundaram, expressed enthusiasm for the company’s integration into SLB, foreseeing enhanced capabilities, a broader portfolio, and increased resources to lead the industry in sustainable energy provision.
“Today’s announcement marks the start of an exciting next chapter for ChampionX,” Somasundaram said. “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,” he continued.
SLB anticipates realizing approximately $400 million in annual pretax synergies within the first three years post-closing, achieved through revenue growth and cost-saving measures. The transaction is subject to ChampionX shareholders’ approval, regulatory clearances, and customary closing conditions, with expected completion before the end of 2024.
SLB also announced today that it will return $7 billion to shareholders over the next two years. SLB will increase its 2024 shareholder returns to a target of $3 billion as well as set a target for 2025 shareholder returns of $4 billion.
“This commitment to our shareholders for 2024 and 2025 highlights our confidence in the value this transaction will create and, in our ability, to continue generating strong cash flow from our broader portfolio this year and next,” Le Peuch said.
