The deal, still subject to shareholder and regulatory approval, values Smith stock at $45.84 a share, according to a joint statement by the companies on Sunday.
The acquisition is the latest in a string of oilfield services deals as the sector begins to recover, reports Reuters.
After the deal, Schlumberger can boast revenues double that of nearest rival Halliburton, which had 2009 revenues of $14.7bn.
Schlumberger said it expects the acquisition to add to earnings per share in 2012. Under the terms of the deal, Smith shareholders will receive 0.6966 shares of Schlumberger for each Smith share.
On closing, Smith shareholders will hold about 12.8% of Schlumberger’s outstanding shares.