HOUSTON: SLB (NYSE: SLB) and ChampionX Corporation (NASDAQ: CHX) announced today a definitive agreement for SLB to acquire ChampionX in an all-stock transaction.

The agreement was unanimously approved by the ChampionX board of directors.

According to the terms of the agreement, ChampionX shareholders will receive 0.735 ordinary shares of SLB in exchange for each share of ChampionX.

Upon completion of the transaction, ChampionX shareholders will own about 9% of SLB’s outstanding ordinary shares.

The acquisition of ChampionX by SLB comes at an important time for the industry.

The production phase of oil and gas operations generally covers most of the life cycle of an asset, from completion to decommissioning.

This values the ability of service providers to help clients face challenges throughout their production system.

At the same time, there is a growing search to expand emerging technologies, such as AI and autonomous operations, in international operations.

“Our clients are looking to maximize their assets while improving efficiency in the production and reservoir recovery phase of their operations,” said Olivier Le Peuch, CEO of SLB.

“This represents a significant opportunity for service providers who can partner with clients throughout the entire production lifecycle, by offering integrated solutions and adding differentiated value.

The combination of ChampionX’s strong production-focused leadership across North America and beyond, with our own international presence, unparalleled technology portfolio, and track record of innovation will generate tremendous value for our customers and stakeholders.

“Our main strategy remains focused on meeting the growing energy demand while simultaneously accelerating decarbonization and emission reduction through innovation, scaling, and digitization in our core oil and gas business. This acquisition will expand SLB’s presence in the less cyclical and growing production and recovery scope, strictly aligned with our strategy focused on returns and low capital,” said Le Peuch.

“Today’s announcement marks the beginning of a promising next chapter for ChampionX,” said Soma Somasundaram, President and CEO of ChampionX.

“We are on a journey to build the best company focused on production in our sector, with the goal of unlocking energy through our differentiated products and technology, as well as our solid financial mechanism. Becoming part of SLB will give us a much broader portfolio, as well as the resources and reach to continue leading the industry in providing energy to the world in an economically and environmentally sustainable way. Our companies share a vision for the future of energy that leverages technology and innovation to solve our customers’ most complex problems and better serve the communities where we operate.

“Looking to the future, I am confident that our talented employees will benefit from greater opportunities as part of a larger organization. For our shareholders, the combination provides compelling value creation and the opportunity to share significant synergy benefits, including accelerated growth opportunities, due to the complementary nature of the respective portfolios. I have long admired SLB’s focus on technology and innovation, as well as its global reach, and throughout our engagement with them, I have also been impressed with their commitment to preserving and capitalizing on everything that has made ChampionX a success. Lastly, I want to thank our employees for their ongoing commitment to our purpose of improving lives,” said Somasundaram.

SLB expects to achieve annual pre-tax synergies of about $400 million in the first three years after closing, through revenue growth and cost savings.

The transaction is subject to the approval of ChampionX shareholders, regulatory approvals, and other customary closing conditions. The transaction is expected to be completed before the end of 2024.

SLB also announced today that it will return $7 billion to shareholders over the next two years. SLB will increase its shareholder returns in 2024 to a target of $3 billion, as well as set a target for shareholder returns in 2025 of $4 billion.

“This commitment to our shareholders for 2024 and 2025 highlights our confidence in the value that this transaction will create and our ability to continue generating a strong cash flow from our broader portfolio this year and next,” said Le Peuch