Schlumberger Ltd has announced that is has entered into a definitive merger agreement with Cameron in which both companies will combine in a stock and cash transaction. Under the terms of the agreement, Cameron shareholders will receive 0.716 shares of Schlumberger common stock.
Based on the closing stock of the two companies on 25 August 2015, the agreement places a value of US$66.36 per Cameron share, representing a 37% premium to Cameron's 20-day volume weighted average price of US$48.45 per share, and a 56.3% premium to Cameron's most recent closing stock price of US$42.47 per share. Upon closing, Cameron shareholders will own approximately 10% of Schlumberger's outstanding shares of common stock.
Schlumberger expects to realise pretax synergies of approximately US$300 million and US$600 million in the first and second year, respectively.
Chairman and Chief Executive Officer of Schlumberger, Paal Kibsgaard, remarked: “This agreement with Cameron opens new and broader opportunities for Schlumberger. At our investor conference in June 2014, we highlighted how the E&P industry must transform to deliver increased performance at a time of range-bound commodity prices. With oil prices now at lower levels, oilfield services companies that deliver innovative technology and greater integration while improving efficiency, which our customers increasingly demand, will outperform the market […] We look forward to welcoming the talented employees of Cameron and are pleased that they will be joining the Schlumberger tea as our fourth product group.”
Chairman and CEO of Cameron, Jack Moore, added: “By bringing together Cameron and Schlumberger, we will be uniting two great companies with successful track records, performance and value creation. We look forward to working closely with Schlumberger to achieve a seamless post-closing integration and long-term value for all of our stakeholders."
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$59 billion.
Edited from press release by Angharad Lock
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