Schlumberger to spend $7.7 billion on buying ChampionX

ChampionX Corp (NASDAQ: CHX) is in focus today after Schlumberger NV (NYSE: SLB) said it will buy the oilfield technology company for $7.75 billion.

$SLB deal values ChampionX stock at 14% premium

The all-stock deal values each share of ChampionX at $40.59 – a more than 14% premium on their previous close.

$SLB is convinced the acquisition will deliver about $400 million in annual pre-tax savings in the first three years. Olivier Le Peuch – its chief executive said in a press release on Tuesday:

The news arrives only days before the New York listed firm is scheduled to report its quarterly financial results. Consensus is for it to earn 75 cents a share versus 63 cents per share a year ago.

Schlumberger commits to increasing shareholder returns

Schlumberger expects the announced transaction to complete before the start of 2025 provided that it satisfied the customary closing conditions including regulatory and shareholders’ approval.

In February ChampionX said it generated $3.76 billion in revenue in 2023 – down about 1.25% on a year-over-year basis.

On Tuesday, $SLB also committed to increasing its shareholder returns to $3.0 billion in 2024. The world’s largest offshore drilling company wants to return $7.0 billion to investors over the next two years.

Wall Street currently has a consensus “buy” rating on shares of Schlumberger NV that currently pay a dividend yield of nearly 2.0%.