SLB acquires ChampionX in all-stock deal

SLB (NYSE: SLB) has announced the acquisition of ChampionX Corporation (NASDAQ: CHX) in an all-stock transaction. The agreement will see ChampionX shareholders receiving 0.735 shares of SLB common stock for each ChampionX share. At the closing of the transaction, ChampionX shareholders will own approximately 9% of SLB’s outstanding shares of common stock.

The acquisition is expected to bring annual pre-tax synergies of approximately $400 million within three years. Furthermore, SLB aims to increase its total returns to shareholders to a target of $3 billion in 2024, with a set target for returns to shareholders of $4 billion in 2025.

SLB's CEO, Olivier Le Peuch, believes that the acquisition will expand SLB’s presence in the less cyclical and growing production and recovery space, aligning with the company's returns-focused, capital-light strategy. Le Peuch emphasized that the combination of ChampionX’s strong production-focused leadership with SLB’s international presence, technology portfolio, and history of innovation will drive significant value for customers and stakeholders.

ChampionX's President and CEO, Soma Somasundaram, expressed confidence in the acquisition, stating that it marks the start of an exciting next chapter for ChampionX. He believes that becoming part of SLB will provide a much broader portfolio and the resources needed to continue leading the industry in providing energy in an economically and environmentally sustainable way.

SLB also announced its commitment to returning $7 billion to shareholders over the next two years, with $3 billion targeted for 2024 and a set target for 2025 shareholder returns of $4 billion. This commitment reflects SLB's confidence in the value the transaction will create and its ability to continue generating strong cash flow from its broader portfolio.

The transaction is subject to ChampionX shareholders’ approval, regulatory approvals, and other customary closing conditions, with the closing anticipated before the end of 2024.

SLB will hold a conference call to discuss the acquisition and its impact at 8:00 am CDT/9:00 am EDT on April 2, 2024. The call will be open to the public, and a webcast will be available for those unable to attend.

SLB, a global technology company, operates in more than 100 countries and focuses on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing new energy systems to accelerate the energy transition. On the other hand, ChampionX Corporation is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that support oil and gas drilling and production worldwide.

The acquisition is expected to significantly impact the companies' future operations and the industry as a whole, as they aim to drive customer value through industry expertise, digital integration, and enhanced equipment life and production optimization. As a result of these announcements, the company's shares have moved 9.6% on the market, and are now trading at a price of $38.81. If you want to know more, read the company's complete 8-K report here.

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