Schlumberger to buy Cameron in $14.8 bln deal

Schlumberger, the world’s leading oilfield services company, said today it is acquiring equipment maker Cameron in a deal valued at US$14.8 billion (RM62.9 billion). For replacement purposes, Cameron’s investors will receive $14.44 in cash and 0.716 of Schlumberger’s share – for each share held.

Cameron’s shares shot up to $61.94 in premarket trading on Wednesday, while Schlumberger’s shares rose 1.4 per cent to $73.57.

The deal is the latest in an industry that is consolidating amid sharply lower oil prices.

That deal has run afoul U.S. antitrust enforcers who believe the $35 billion-merger could lead to higher prices and stifle innovation, according to Reuters sources.

The deal, subject to approval by Cameron shareholders as well as regulatory clearance, is expected to be completed in the first quarter of 2016. Schlumberger expects pretax synergies to total approximately $300 million and $600 million in the first and second year, respectively.

Upon closing, Cameron shareholders will own about 10 percent of Schlumberger’s outstanding shares of common stock.

The deal will combine the downhole and surface operation technologies of the two companies.

The combined company had 2014 pro forma revenue of $59 billion.

Shareholder rights law firm Johnson & Weaver, LLP has launched an investigation into whether the board members of Cameron global Corporation (NYSE: CAM) breached their fiduciary duties in connection with the proposed sale of the Company to Schlumberger Limited.

“This agreement with Cameron opens new and broader opportunities for Schlumberger”, said Paal Kibsgaard, chairman and CEO of Schlumberger said in a statement.

Schlumberger expects the combination to be accretive to earnings per share by the end of the first year after closing.

“In addition, we will achieve significant efficiency gains through lowering operating costs, streamlining supply chains, and improving manufacturing processes while leveraging the Schlumberger transformation platform”, Kibsgaard said.

Goldman Sachs & Co.is Schlumberger’s financial adviser and Baker Botts LLP and Gibson Dunn & Crutcher LLP are its legal counsel.