SLB Acquires ChampionX for $7.8B, Evercore ISI Optimistic

April 5, 2024: In a move indicative of consolidation within the North American energy sector, Schlumberger Limited (SLB) announced the acquisition of its competitor, ChampionX Corporation (CHX), on April 2nd, 2024. The all-stock transaction is valued at approximately $7.75 billion.

ChampionX shareholders will receive 0.735 shares of SLB common stock for each CHX share, translating to a price of $40.59 per share. This represents a premium of 14.6% over ChampionX’s closing stock price on the day before the announcement. Schlumberger’s most significant purchase since its $14.8 billion acquisition of Cameron International in 2016.

Analysts at Evercore ISI view the acquisition favorably. They note that the deal will enable Schlumberger to enhance the efficiency of its customers’ well production and reservoir recovery processes. Additionally, the acquisition expands Schlumberger’s exposure to the growing and less cyclical production segment within the global energy market. This aligns with Schlumberger’s focus on delivering strong returns and maintaining a capital-light business model.

The transaction follows a trend of consolidation within the North American energy sector. Companies are increasingly seeking to streamline operations and address challenges related to both operational efficiency and pricing pressures. This acquisition positions Schlumberger to offer a wider range of services across the oil and gas production lifecycle.

Market observers are keenly interested in this deal’s potential effects on the broader energy market. While the specific details regarding cost savings and operational synergies remain undisclosed, the acquisition is likely to have a lasting impact on the competitive landscape. Further details regarding the integration plans and potential cost savings could provide a clearer picture of Schlumberger’s long-term benefits.

Despite analysts’ positive outlook, the success of the acquisition will ultimately hinge on Schlumberger’s ability to effectively integrate ChampionX’s operations and leverage the combined expertise to deliver enhanced value to its customers.