SLB to acquire ChampionX in strategic all-stock deal to boost sustainable energy solutions
SLB (NYSE: SLB) and ChampionX Corporation (NASDAQ: CHX) have made a significant move in the energy sector by announcing a definitive agreement for SLB to acquire ChampionX in an all-stock transaction, a decision that has garnered unanimous support from the ChampionX board of directors. This strategic acquisition signals a pivotal moment in the industry, particularly for the production phase of oil and gas operations, which constitutes a major part of an asset’s lifecycle.
Under the terms of the agreement, ChampionX shareholders will receive 0.735 shares of SLB common stock for each share of ChampionX they own. Upon the transaction’s closing, ChampionX shareholders will possess approximately 9% of SLB’s outstanding shares of common stock. This deal underscores SLB’s commitment to enhancing its service offerings across the entire production system, meeting the growing demand for scaling emerging technologies like AI and autonomous operations.
Olivier Le Peuch, CEO of SLB, highlighted the opportunity this acquisition presents in helping customers maximize asset efficiency and improve production and reservoir recovery phases. Le Peuch emphasized the synergy between ChampionX’s leadership in production across North America and SLB’s global presence, technology portfolio, and innovation history as key drivers for delivering value to customers and stakeholders.
Soma Somasundaram, President and CEO of ChampionX, reflected on the merger as the beginning of an exciting new chapter for ChampionX, aimed at unlocking energy through differentiated products, technology, and a strong financial engine. Somasundaram praised the combined vision for the future of energy, leveraging technology and innovation to address complex challenges and serve communities more effectively.
SLB anticipates realizing annual pretax synergies of approximately $400 million within the first three years post-closing, through revenue growth and cost savings. The transaction is pending ChampionX shareholder approval, regulatory approvals, and other customary closing conditions, with an expected closure before the end of 2024.
Furthermore, SLB announced plans to return $7 billion to shareholders over the next two years, increasing its shareholder returns target to $3 billion for 2024 and setting a target of $4 billion for 2025. This commitment reflects SLB’s confidence in the transaction’s value creation and its capability to generate strong cash flow.
ChampionX is renowned for its global leadership in chemistry solutions, artificial lift systems, and engineered equipment and technologies that enhance oil and gas production efficiency and sustainability. SLB, a global technology company, is at the forefront of driving energy innovation for a balanced planet, with a focus on digitalization, decarbonization, and new energy systems development.
This acquisition marks a transformative step for both companies, aligning with SLB’s returns-focused, capital-light strategy and expanding its presence in the less cyclical, growing production and recovery space. It sets the stage for both entities to lead the industry in providing sustainable energy solutions through innovative, technology-driven approaches.
The acquisition of ChampionX by SLB is a testament to the evolving landscape of the energy sector, where digitalization and sustainability are becoming increasingly critical. This merger not only signifies a strategic alignment of two industry leaders but also represents a forward-looking approach to addressing the energy needs of the future while ensuring environmental sustainability.