Schlumberger to buy ChampionX for $7.8 billion

Schlumberger (‘SLB’) has agreed to buy ChampionX for $7.8 billion in an all-stock transaction. ChampionX has its head office in The Woodlands.

ChampionX was formed in 2020 from the merger of Apergy Corporation (itself a spinoff from Dover Corporation) and the upstream division (aka Nalco Champion) of Ecolab. Apergy was primarily involved in Artificial Lift, while Nalco Champion primarily manufactured oilfield chemicals.

In 2023, ChampionX had revenues of $3.8 billion. Two-thirds came from Chemicals, a quarter from Artificial Lift and the rest from Drilling Products and Reservoir Chemical Technologies. The company has 7,300 employees in 38 countries.

SLB, which has a market cap of $79 billion, believes that ChampionX’s focus on production will reduce its cyclical exposure from the drilling side of the business. From a customer’s perspective, E&P companies treat drilling as capex, while production costs are operating expenses.

ChampionX also helps SLB increase its presence in North America. Currently, SLB generates only 21% of its revenues from that region. Compare that to its main rival, Halliburton, which derives 46% of its revenues from North America.

SLB expects to generate $400 million in annual savings by 2027 from eliminating duplicate G&A overheads, reduced operating costs and supply chain optimization.

SLB expects the deal to close in late 2024.

Investor Presentation – SLB ChampionX

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