Schlumberger to acquire offshore service firm Cameron

A long-recognized oilfield giant is acquiring a Texas-based service firm in a stock and cash deal that will result in a merger.

The company being acquired by Schlumberger, Houston-based Cameron, is no dwarf itself.

The deal is estimated at totaling $14.8 billion.

Cameron is a leading provider of flow equipment products, systems and services to worldwide oil and gas industries. The company employs over 24,000 full-time personnel and operates in more than 300 locations around the world.

Schlumberger is a supplier of technology, integrated project management and information solutions to the global oil and gas industry. Company materials say it employs approximately 108,000 people representing over 140 nationalities, working in approximately 85 countries, Schlumberger provides the industry’s widest range of products and services from exploration through production.

Schlumberger Limited, the firm making the Cameron acquisition, has principal offices in Paris, Houston, London and The Hague, and reported revenues of $48.58 billion in 2014.

The transaction combines two complementary technology portfolios into “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 $59 billion.

“This agreement with Cameron opens new and broader opportunities for Schlumberger, said the firm’s CEO, Paal Kibsgaard. “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 believe that the next industry technical breakthrough will be achieved through integration of Schlumberger’s reservoir and well technologies with Cameron’s leadership in surface, drilling, processing and flow control technologies.

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

Kibsgaard cited “significant efficiency gains through lowering operating costs, streamlining supply chains, and improving manufacturing processes while leveraging the Schlumberger transformation platform” as other positives.

“We look forward to welcoming the talented employees of Cameron and

are pleased that they will be joining the Schlumberger team as our fourth product group,” he said.

Cameron CEO Jack Moore said the transaction builds on an existing partnership that is already successful.

“For our shareholders, this combination provides significant value, while also enabling them to own a meaningful share of Schlumberger,” Moore said of the deal, which includes stock swaps.

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

Goldman, Sachs & Co. is acting as financial advisor, and Baker Botts LLP and Gibson Dunn & Crutcher LLP are serving as legal counsel, to Schlumberger. Credit Suisse is acting as financial advisor and Cravath, Swaine & Moore LLP is serving as legal counsel to Cameron.