Schlumberger had announced conclusive merger agreement with Cameron in which both companies shall combine in a stock and cash transaction. The agreement was unanimously confirmed by the boards of directors of both companies on Thursday.
Under the terms of the agreement, Cameron shareholders will get 0.716 shares of Schlumberger common stock and a cash payment of $14.44 in exchange for each of Cameron share.
The transaction is subject to the approval of Cameron shareholders, regulatory and other customary closing conditions. The closing of the transaction is expected to occur in the first quarter of 2016.
Goldman, Sachs & Co. acts as the financial advisor, and Baker Botts LLP and Gibson Dunn & Crutcher LLP will serve as the legal counsel to Schlumberger. On the other hand, Credit Suisse will act as the financial advisor and Cravath, Swaine & Moore LLP will serve as the legal counsel for Cameron.
Schlumberger is the world's number one leading supplier of technology, information solutions and integrated project management to customers who work in the oil and gas industry around the world.
It employs about 108,000 workers representing over 140 nationalities and work in almost 85 countries. The company supplies the industry's widest range of products and services from exploration via production.
Cameron is the leading supplier of flow equipment products, systems and services to oil and gas industries all over the world. It has a workforce of over 24,000 full-time personnel and operates in more than 300 locations worldwide.
Since the announcement of Schlumberger's acquisition of Cameron International for $14.8 billion, the market seemed optimistic about the deal, since the former's stock slid only to 3.4% on Wednesday, August 26th, when the news became public, contrary to a 12% decline witnessed by its closest competitor Halliburton when it announced the deal with Baker Hughes in November last year.
Some key highlights of the agreement are the deal price of $66.36 per share will represent 56.3% premium to Cameron's closing stock price of $42.46 per share on Tuesday.
On closure of the deal, shareholders of Cameron will approximately own 10% of Schlumberger's outstanding shares.
Synergies of $300 million and $600 million are expected in the first and second years respectively, to make the transaction EPS accretive to Schlumberger in the first year itself.
The combined entity will offer the industry's first integrated drilling and production system to the oil and gas industry clients.
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