U.S. oilfield services company SLB (SLB) is buying rival ChampionX (CHX) in an all-stock deal worth $7.75 billion U.S.
The acquisition is the latest in a wave of consolidation that is sweeping across the U.S. energy sector.
It is SLB's biggest purchase since 2016 when it bought oilfield equipment maker Cameron International for $14.8 billion U.S.
SLB said the acquisition of ChampionX will bolster its operations by adding production chemicals and artificial lift technologies.
Under terms of the deal, ChampionX shareholders will receive 0.735 shares of SLB common stock, or $40.59 U.S. per share, representing a premium of 14.6% to ChampionX's last closing price of $35.40 U.S.
ChampionX stock rose 11% on news of the acquisition, while SLB’s share price declined 1%.
SLB said it expects an annual pre-tax savings of about $400 million U.S. in the first three years after the deal closes by the end of 2024.
In announcing the deal, SLB said it plans to return $7 billion U.S. to shareholders over the next two years in the form of stock buybacks and dividend payments.
