425: SLB Acquisition of ChampionX Faces Delay Due to Regulatory Review in Norway

SLB announces that its planned acquisition of ChampionX is now expected to close by the end of the first quarter or early in the second quarter of 2025 due to an ongoing Phase II review by the Norwegian Competition Authority.

Summary

• SLB (Schlumberger) is pursuing the acquisition of ChampionX.
• The U.S. Hart-Scott-Rodino (HSR) Antitrust Improvements Act waiting periods have expired, allowing the transaction to proceed in the United States.
• SLB and ChampionX have agreed to sell ChampionX's equity interests in US Synthetic Corporation (USS) to a third party, while SLB will retain its MegaDiamond business.
• The acquisition is still subject to antitrust review in other jurisdictions, specifically Norway, where the Norwegian Competition Authority has initiated a Phase II review.
• Due to the ongoing review in Norway, the expected closing date of the transaction has been pushed back to the end of the first quarter or early in the second quarter of 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the deal is progressing in the U.S., the delay in Norway introduces uncertainty. The sale of USS is a concession, but retaining MegaDiamond is a positive.

Positives

• The expiration of the HSR waiting period in the U.S. removes a significant hurdle for the acquisition.
• The agreement to sell USS addresses potential antitrust concerns.
• SLB will retain its MegaDiamond business, which is strategic for drill bit manufacturing.

Negatives

• The Phase II review by the Norwegian Competition Authority introduces uncertainty and delays the closing of the transaction.
• The delay pushes the expected closing date to the end of Q1 or early Q2 2025.

Risks

• The ongoing antitrust review in Norway could potentially lead to further delays or require additional concessions.
• The ultimate outcome of the proposed transaction between SLB and ChampionX is not guaranteed.
• Difficulties in integrating the businesses of SLB and ChampionX could impact the anticipated synergies and value creation.
• Changes in demand for SLB's or ChampionX's products and services could affect the financial performance of the combined entity.
• Global market, political, and economic conditions could impact the success of the acquisition.

Future Outlook

SLB expects the ChampionX transaction to close by the end of the first quarter or early in the second quarter of 2025, subject to remaining regulatory approvals and customary closing conditions.

Industry Context

The acquisition of ChampionX is part of a broader trend in the oil and gas industry towards consolidation and the integration of digital technologies and chemical solutions to enhance production efficiency and sustainability.

Stakeholder Impact

• Shareholders of ChampionX are awaiting the completion of the acquisition by SLB.
• Employees of both SLB and ChampionX face uncertainty during the integration process.
• Customers of both companies may experience changes in product offerings and service delivery.
• Suppliers and other business partners may need to adjust to the combined entity's requirements.

Next Steps

• SLB and ChampionX will continue to cooperate with the Norwegian Competition Authority during its Phase II review.
• The companies will work to satisfy the remaining closing conditions for the transaction.
• SLB and ChampionX will proceed with the sale of ChampionX's equity interests in US Synthetic Corporation (USS) to a third-party buyer.

Key Dates