425: SLB to Acquire ChampionX: Customer Communication Guidance Released

SLB (Schlumberger) has announced its intent to acquire ChampionX, and this document provides guidance to the sales and commercial team on how to handle customer inquiries regarding the transaction.

Summary

• SLB (Schlumberger) intends to acquire ChampionX.
• This document provides guidance to the sales and commercial team on how to address customer inquiries about the acquisition.
• Employees are instructed to organize calls or meetings with customers, share the benefits of the acquisition, and adhere strictly to provided talking points.
• Due to legal requirements, emailing details about the transaction to customers is prohibited.
• SLB and ChampionX will continue to operate independently until the transaction closes.
• The document contains forward-looking statements subject to risks and uncertainties.
• SLB intends to file a registration statement on Form S-4 with the SEC, including a proxy statement of ChampionX and a prospectus of SLB.
• Investors and security holders are urged to read the registration statement, proxy statement/prospectus, and other relevant documents carefully.
• The document also provides information about participants in the solicitation of proxies.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The document is informational, providing guidance on a pending acquisition. While acquisitions can be positive, there are also inherent risks and uncertainties.

Positives

• The document provides clear guidance to the sales and commercial team on how to communicate with customers regarding the acquisition, ensuring a consistent message.
• Maintaining regular communication with customers regarding business matters outside the scope of the acquisition is encouraged, ensuring business continuity.

Risks

• The ultimate outcome of the proposed transaction between SLB and ChampionX is uncertain.
• The announcement of the proposed transaction could negatively affect the businesses.
• Difficulties in retaining and hiring key personnel and employees could arise.
• Maintaining favorable business relationships with customers, suppliers, and other business partners could be challenging.
• The terms and timing of the proposed transaction are subject to change.
• The occurrence of any event, change, or other circumstance could lead to the termination of the proposed transaction.
• The anticipated or actual tax treatment of the proposed transaction is uncertain.
• Satisfying closing conditions to the completion of the proposed transaction could be difficult.
• Integrating the business successfully and achieving anticipated synergies and value creation from the proposed transaction is not guaranteed.
• Changes in demand for SLB's or ChampionX's products and services could occur.
• Global market, political, and economic conditions could negatively impact the transaction.
• Securing government regulatory approvals on the terms expected, at all or in a timely manner is not guaranteed.
• The extent of growth of the oilfield services market generally, including for chemical solutions in production and midstream operations is uncertain.
• The global macro-economic environment, including headwinds caused by inflation, rising interest rates, unfavorable currency exchange rates, and potential recessionary or depressionary conditions could negatively impact the transaction.
• The impact of shifts in prices or margins of the products that SLB or ChampionX sells or services that SLB or ChampionX provides, including due to a shift towards lower margin products or services is uncertain.
• Cyber-attacks, information security and data privacy could negatively impact the transaction.
• The impact of public health crises, such as pandemics (including COVID-19) and epidemics and any related company or government policies and actions to protect the health and safety of individuals or government policies or actions to maintain the functioning of national or global economies and markets is uncertain.
• Trends in crude oil and natural gas prices, including trends in chemical solutions across the oil and natural gas industries, that may affect the drilling and production activity, profitability and financial stability of SLB's and ChampionX's customers and therefore the demand for, and profitability of, their products and services is uncertain.
• Litigation and regulatory proceedings, including any proceedings that may be instituted against SLB or ChampionX related to the proposed transaction could negatively impact the transaction.
• Failure to effectively and timely address energy transitions that could adversely affect the businesses of SLB or ChampionX, results of operations, and cash flows of SLB or ChampionX could negatively impact the transaction.
• Disruptions of SLB's or ChampionX's information technology systems could negatively impact the transaction.

Future Outlook

The document outlines the proposed transaction between SLB and ChampionX and provides forward-looking statements regarding the benefits and anticipated timing of the transaction, as well as expectations regarding the businesses of both companies.

Industry Context

This acquisition reflects a trend of consolidation in the oilfield services industry, as companies seek to expand their offerings and improve efficiency. The combination of SLB and ChampionX could create a more comprehensive service provider, better positioned to compete in the market.

Comparison to Industry Standards

• It is difficult to compare the results of this announcement to global benchmarks as it is a communication document regarding an acquisition, not a financial report.
• However, the communication strategy outlined in the document is consistent with industry best practices for managing customer relations during a merger or acquisition.

Stakeholder Impact

• Shareholders of ChampionX will be asked to vote on the proposed transaction.
• Employees of both SLB and ChampionX may experience uncertainty during the integration process.
• Customers of both companies may benefit from a broader range of products and services.
• Suppliers and other business partners may need to adjust to the combined entity.

Next Steps

• ChampionX stockholders will need to adopt the merger agreement.
• SLB will file a registration statement on Form S-4 with the SEC.
• The definitive proxy statement/prospectus will be mailed to stockholders of ChampionX.
• SLB and ChampionX will seek government regulatory approvals.

Key Dates