425: Schlumberger to Acquire ChampionX in Stock Deal Valued at \$11 Billion

Schlumberger (SLB) is set to acquire ChampionX Corporation in an all-stock transaction, aiming to enhance its production and recovery solutions.

Summary

• Schlumberger N.V. (SLB) and ChampionX Corporation have entered into a definitive agreement for SLB to acquire ChampionX in an all-stock transaction.
• ChampionX stockholders will receive 0.735 shares of SLB common stock for each ChampionX share.
• The transaction values ChampionX at approximately \$11 billion, based on SLB's closing stock price on April 1, 2024.
• SLB intends to file a registration statement on Form S-4 with the SEC, including a proxy statement/prospectus.
• The deal is subject to customary closing conditions, including ChampionX stockholder approval and regulatory approvals.
• The merger is expected to close by the end of 2024.
• The agreement includes provisions for termination fees under certain circumstances.
• The document outlines the terms and conditions of the merger, including stock conversion, employee benefits, and regulatory filings.

Sentiment

Score: 7

Explanation: The document is a formal announcement of a significant acquisition, presenting a balanced view of the transaction's benefits and potential risks. The sentiment is cautiously optimistic, reflecting the potential for value creation but also acknowledging the uncertainties involved.

Positives

• The acquisition is expected to enhance SLB's production and recovery offerings.
• ChampionX stockholders will receive shares in a larger, more diversified company.
• The merger is anticipated to create synergies and value creation for SLB and its stakeholders.

Negatives

• The deal is subject to regulatory approvals, which could potentially delay or prevent the transaction.
• There are termination fees associated with the agreement, which could be triggered under certain circumstances.
• The value of the deal is tied to SLB's stock price, which could fluctuate.

Risks

• The ultimate outcome of the proposed transaction is uncertain, including the possibility that ChampionX stockholders will not adopt the merger agreement.
• The announcement of the proposed transaction could have an adverse effect on the businesses of SLB and ChampionX.
• Difficulties in retaining and hiring key personnel and employees could arise.
• The ability to maintain favorable business relationships with customers, suppliers, and other business partners is at risk.
• Changes in demand for SLB's or ChampionX's products and services could impact the success of the merger.
• Global market, political, and economic conditions could pose challenges.
• The ability to secure government regulatory approvals on the terms expected, at all or in a timely manner is not guaranteed.
• Litigation and regulatory proceedings related to the proposed transaction could arise.
• Failure to effectively and timely address energy transitions could adversely affect the businesses of SLB or ChampionX.
• Disruptions of SLB's or ChampionX's information technology systems could occur.

Future Outlook

The document contains forward-looking statements regarding the proposed transaction, its benefits, and anticipated timing, as well as information about the businesses of SLB and ChampionX.

Industry Context

This acquisition reflects a trend in the oilfield services industry towards consolidation and the integration of complementary technologies to enhance production and recovery solutions.

Comparison to Industry Standards

• A comparable company to ChampionX is Apergy, which merged with Champion Technologies to form ChampionX.
• SLB's acquisition of ChampionX is similar to other large mergers in the oilfield services sector, such as Halliburton's acquisition of Baker Hughes (which was later terminated) and TechnipFMC's merger.
• The all-stock nature of the deal is a common structure in large mergers to preserve cash and allow for future growth.

Stakeholder Impact

• ChampionX stockholders will receive SLB shares, potentially benefiting from the combined company's future performance.
• Employees of both companies may experience changes in their roles and responsibilities.
• Customers could benefit from enhanced products and services resulting from the merger.
• Suppliers may see changes in their relationships with the combined company.
• Creditors will be affected by the changes to the financial structure of the companies.

Next Steps

• SLB will file a registration statement on Form S-4 with the SEC.
• ChampionX will hold a stockholder meeting to vote on the merger agreement.
• The parties will seek regulatory approvals.
• The companies will work towards closing the transaction by the end of 2024.

Key Dates