SLB Buys Chemistry and Artificial Lift Specialist ChampionX

The world's largest oilfield service company made the deal to expand its exposure to the less cyclical production segment of the upstream business.

Integrating the right surface lubricator and digital controller in a gas lift system
Integrating a surface lubricator and digital controller in a gas lift system.
Source: ChampionX.

Global oilfield service company SLB announced today it is acquiring chemistry and logistics specialist ChampionX in an all-stock transaction.

The deal, valued at around $7.75 billion, will see ChampionX shareholders receive 0.735 shares of SLB common stock for each share of Houston-based ChampionX, or about 9% of SLB’s total outstanding shares.

The North American-focused ChampionX is known especially for its role in providing various solutions for enhanced oil recovery, well intervention, and artificial lift.

SLB noted that its purchase broadens its offerings in the production segment of the upstream industry which, as opposed to drilling and completions, represents the majority of a well’s lifespan.

“Our customers are seeking to maximize their assets while improving efficiency in the production and reservoir recovery phase of their operations. This presents a significant opportunity for service providers who can partner with customers throughout the entire production life cycle, offering integrated solutions and delivering differentiated value,” Olivier Le Peuch, CEO of SLB, said in a statement.

SLB said it expects the combination of the firms to net a pretax savings on corporate overlap and value creation equal to about $400 million over the first 3 years after closing, which is anticipated before the end of this year.

The international service company also said it plans on sending $7 billion back to its investors over the next 2 years, with $3 billion of that planned to be returned this year.

This deal follows SLB's announcement on 27 March that is was combining its carbon capture business with Norway's Aker Carbon Capture to support accelerated industrial decarbonization at scale.

SLB will own 80% of the combined business and pay NOK 4.12 billion ($381 million) in cash for Aker Carbon Capture Holding (ACCH). ACCH will pay $50 million to purchase SLB’s carbon capture business and hold the remaining 20% stake.