Schlumberger Limited and Cameron International have announced a merger agreement in which the two companies will combine in a stock and cash transaction
The transaction combines two complementary technology portfolios into a ‘pore-to-pipeline’ products and services offering to the global oil and gas industry. On a pro-forma basis, the combined company had 2014 revenues of US$59bn.
Schlumberger expects pretax synergies worth approximately US$300mn and US$600mn in the first and second years, respectively. The synergies are primarily related to reducing operating costs, streamlining supply chains, and improving manufacturing processes, with a growing component of revenue synergies in the second year and beyond.
“With oil prices now at lower levels, oilfield services companies that deliver innovative technology and greater integration while improving efficiency” will outperform the market, said Paal Kibsgaard, CEO of Schlumberger. “Deep reservoir knowledge further enabled by instrumentation, software and automation, will launch a new era of complete drilling and production system performance,” he added.
The transaction is subject to Cameron shareholders’ approval, regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur in the first quarter of 2016.
Jack Moore, CEO of Cameron, said, “This exciting transaction builds on our successful partnership with Schlumberger on OneSubsea and will position Cameron for its next phase of growth. Together, we will create a premier oilfield equipment and service company with an integrated and expanded platform to drive accelerated growth.”
Goldman, Sachs & Co. is acting as financial advisor, and Baker Botts LLP and Gibson Dunn & Crutcher LLP are serving as legal counsel, to Schlumberger. Credit Suisse is acting as financial advisor and Cravath, Swaine & Moore LLP is serving as legal counsel to Cameron.
The total value of the transaction, as on 25 August 2015, was US$14.8bn.
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