Cameron International

Oil services group Schlumberger has signed an agreement to acquire the US-based flow equipment products manufacturer Cameron International in a transaction valued at $14.3bn.

Under the definitive merger agreement, the companies will combine in a stock and cash transaction. Cameron shareholders will receive 0.716 shares of Schlumberger common stock in addition to a cash payment of $14.44 in exchange for each Cameron share.

The shareholders of Cameron are expected to own around 10% of Schlumberger’s outstanding shares of common stock, upon close of the transaction.

The transaction will combine two technology portfolios into a ‘pore-to-pipeline’ products and services offering to the oil and gas industry worldwide.

According to Schlumberger, the combined company reported 2014 revenues of $59bn, on a pro forma basis.

During the first and second year, the company expects to realise pretax synergies related to reducing operating costs, streamlining supply chains, and improving manufacturing processes of around $300m and $600m respectively.

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Schlumberger chairman and chief executive officer Paal Kibsgaard said: "This agreement with Cameron opens new and broader opportunities for Schlumberger.

"This exciting transaction builds on our successful partnership with Schlumberger on OneSubsea and will position Cameron for its next phase of growth."

"Deep reservoir knowledge further enabled by instrumentation, software and automation, will launch a new era of complete drilling and production system performance."

Cameron chairman and chief executive officer Jack Moore said: "This exciting transaction builds on our successful partnership with Schlumberger on OneSubsea and will position Cameron for its next phase of growth.

"Together, we will create a premier oilfield equipment and service company with an integrated and expanded platform to drive accelerated growth."

The transaction is subject to Cameron shareholders’ approval, regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur in the first quarter of 2016.

Image: Park Towers South, Houston, Texas which houses the headquarters of Cameron International Corporation. Photo: courtesy of WhisperToMe