Schlumberger to Buy Cameron International for $12.7 Billion -- 3rd Update
August 26 2015 - 8:32AM
Dow Jones News
By Lisa Beilfuss
Schlumberger Ltd. on Wednesday said it agreed to buy Cameron
International Corp. for about $12.74 billion in cash and stock, the
latest move by the world's biggest oil-field services company as
the industry struggles with lower prices and rising supply.
The price tag values Houston-based Cameron--which makes drilling
equipment and supplies maintenance equipment to pipelines,
refineries and wells--at $66.36 a share, a 56.3% premium to
Tuesday's closing price. Amid the downturn in the energy sector,
Cameron shares had fallen 42% over the past 12 months, but they
surged 45% to $61.40 in premarket trading Wednesday.
Cameron shareholders will receive $14.44 in cash and 0.716
Schlumberger shares for each share of Cameron. After completion,
Cameron holders will own about 10% of the combined company.
With oil prices now at lower levels, Schlumberger Chief
Executive Paal Kibsgaard said, "this agreement with Cameron opens
new and broader opportunities for Schlumberger."
The deal is the latest in an industry that is consolidating amid
sharply lower oil prices. This summer, Energy Transfer Equity LP
offered to buy Williams Cos., and a partnership controlled by
refiner Marathon Petroleum Corp. announced plans to acquire
MarkWest Energy Partners LP for $15.8 billion.
Those deals followed Royal Dutch Shell PLC's nearly $70 billion
offer for Britain's BG Group PLC and Halliburton's $35 billion deal
to acquire smaller oil-field services rival Baker Hughes Inc.
Last month, Halliburton and Baker Hughes agreed to extend until
at least Nov. 25 the Justice Department's antitrust review period
of their merger. The companies are the number two and three
oil-field servicers, respectively.
Paris-based Schlumberger said it expects to complete the Cameron
acquisition in the first quarter of 2016, subject to approval by
Cameron shareholders as well as regulatory clearance. On a pro
forma basis, the combined company had 2014 revenue of $59
billion.
Schlumberger said it anticipates pretax synergies of about $300
million in the first year and $600 million in the second year after
the deal closes. The transaction will add to per-share profit by
the end of the first year, Schlumberger said.
Cameron, perhaps best known as the maker of a piece of safety
equipment that helped trigger the 2010 Deepwater Horizon disaster,
settled with BP PLC for $250 million in 2011. The company later
benefited from new regulations on oil wells as companies upgraded
their equipment in the wake of the disaster.
Schlumberger shares, down 35% over the last 12 months, slipped
3.2% in premarket trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 26, 2015 08:17 ET (12:17 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Schlumberger (NYSE:SLB)
Historical Stock Chart
From Apr 2024 to May 2024
Schlumberger (NYSE:SLB)
Historical Stock Chart
From May 2023 to May 2024