What is SLB paying for ChampionX and how is the consideration structured?

The deal is all-stock. ChampionX shareholders receive 0.735 SLB shares per ChampionX share, which the companies valued at $40.59 per ChampionX share based on April 1, 2024 closing prices, a 14.7% premium. Unvested equity awards convert into SLB equivalents, and in-the-money stock appreciation rights are paid in cash.

What are the main conditions and timing for closing?

Closing requires ChampionX stockholder approval, expiration of the HSR waiting period, CFIUS clearance if required, effectiveness of SLB's Form S-4, NYSE listing approval for the new shares, and absence of specified legal restraints. Management expects closing before the end of 2024, and the outside date is April 2, 2025, extendable to October 2, 2025 in certain cases.

What financial exposure do investors face if the deal fails?

ChampionX would owe SLB a $265.4 million termination fee in specified circumstances, such as a change in board recommendation or a competing acquisition. SLB would owe ChampionX $326.6 million in certain regulatory failure or end-date scenarios. These fees are material relative to deal size and show how the parties allocated regulatory and financing risk.

Why is SLB making this acquisition and what does it add?

SLB says the deal strengthens its position in the production phase of oil and gas, which it describes as less cyclical and growing, and aligns with its capital-light, returns-focused strategy. ChampionX adds a leading production chemicals business, artificial lift technologies, a strong North American presence, and a large installed base of connected production equipment.

How does the deal affect SLB's shareholder returns?

Alongside the announcement, SLB raised its 2024 shareholder return target to $3 billion and set a 2025 target of $4 billion, totaling $7 billion over two years. Management ties this commitment to confidence in the deal's value creation and to expected cash flow from its broader portfolio.

SLB 8-K: Material Agreements

01—Abstract

Summary

Summary of the 8-K filed April 2, 2024. Cited figures are marked; the original filing is the authoritative source.

SLB (formerly Schlumberger) has agreed to acquire ChampionX Corporation in an all-stock transaction, with ChampionX shareholders receiving 0.735 SLB shares for each ChampionX share.

Based on the April 1, 2024 closing prices, the deal values ChampionX at $40.59^a per share, a 14.7% premium, and ChampionX holders would own roughly 9% of SLB's outstanding common stock on a pro forma basis. The transaction is unanimously approved by ChampionX's board and approved by SLB's board, and management expects it to close before the end of 2024, subject to ChampionX stockholder approval, HSR and possible CFIUS clearance, an effective Form S-4, and NYSE listing approval. SLB expects roughly $400 million of annual pre-tax cost and revenue synergies within three years of closing, with 70-80% realized in 2026 and the remainder in 2027.

Management projects the deal will be accretive to free cash flow per share in 2025 and to earnings per share in 2026. The acquisition expands SLB's footprint in production chemicals and artificial lift, segments management describes as less cyclical and aligned with its capital-light, returns-focused strategy. ChampionX's FY2023 revenue mix was about 64%^b production chemicals, 27% production and automation technologies, 6% drilling technologies, and 3% reservoir chemicals.

The agreement includes a $265.4 million^c termination fee payable by ChampionX in specified circumstances and a $326.6 million fee payable by SLB in specified regulatory or end-date scenarios. The outside date is April 2, 2025, automatically extendable to October 2, 2025 in certain regulatory cases.

Alongside the deal, SLB plans to return $7 billion^d to shareholders over 2024-2025, raising its 2024 target to $3 billion and setting a 2025 target of $4 billion. Investors should note that the filing relies on forward-looking statements, and the terms and synergy targets remain subject to regulatory review, shareholder approval, and integration risk.

02—Key points

Key Highlights

All-stock deal: each ChampionX share converts into 0.735 SLB shares, valuing ChampionX at $40.59 per share, a 14.7% premium to the April 1, 2024 close.
ChampionX holders will own approximately 9% of SLB's outstanding common stock after closing.
SLB targets about $400 million in annual pre-tax synergies within three years, with 70-80% realized in 2026 and the rest in 2027.
Management expects the deal to be accretive to free cash flow per share in 2025 and to EPS in 2026.
Termination fees: $265.4 million payable by ChampionX and $326.6 million payable by SLB under specified circumstances.
Outside date is April 2, 2025, with an automatic extension to October 2, 2025 in certain regulatory scenarios; closing is expected before end-2024.
SLB raised its 2024 shareholder return target to $3 billion and set a 2025 target of $4 billion ($7 billion total over two years).

03—Questions

Frequently Asked Questions

What is SLB paying for ChampionX and how is the consideration structured?
The deal is all-stock. ChampionX shareholders receive 0.735 SLB shares per ChampionX share, which the companies valued at $40.59 per ChampionX share based on April 1, 2024 closing prices, a 14.7% premium. Unvested equity awards convert into SLB equivalents, and in-the-money stock appreciation rights are paid in cash.
What are the main conditions and timing for closing?
Closing requires ChampionX stockholder approval, expiration of the HSR waiting period, CFIUS clearance if required, effectiveness of SLB's Form S-4, NYSE listing approval for the new shares, and absence of specified legal restraints. Management expects closing before the end of 2024, and the outside date is April 2, 2025, extendable to October 2, 2025 in certain cases.
What financial exposure do investors face if the deal fails?
ChampionX would owe SLB a $265.4 million termination fee in specified circumstances, such as a change in board recommendation or a competing acquisition. SLB would owe ChampionX $326.6 million in certain regulatory failure or end-date scenarios. These fees are material relative to deal size and show how the parties allocated regulatory and financing risk.
Why is SLB making this acquisition and what does it add?
SLB says the deal strengthens its position in the production phase of oil and gas, which it describes as less cyclical and growing, and aligns with its capital-light, returns-focused strategy. ChampionX adds a leading production chemicals business, artificial lift technologies, a strong North American presence, and a large installed base of connected production equipment.
How does the deal affect SLB's shareholder returns?
Alongside the announcement, SLB raised its 2024 shareholder return target to $3 billion and set a 2025 target of $4 billion, totaling $7 billion over two years. Management ties this commitment to confidence in the deal's value creation and to expected cash flow from its broader portfolio.

04—Continue

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