Business
Schlumberger agreed to buy oilfield equipment maker Cameron International for $14.3 billion. Schlumberger will be able to bundle its services, which range from surveying a site to drilling wells, with Cameron's products such as pressure valves and blowout preventers, one of which was used in BP's Macondo well that exploded in 2010, reports Reuters. The two companies already have a joint venture since November 2012 aimed at deepwater drilling services.
"The deal should allow a more complete solution to customers and should allow SLB to grow market share," said BMO Capital Markets analyst Daniel Boyd. "Smaller companies offering discrete products and services will likely be at a disadvantage going forward." Schlumberger said the combined company would have had pro-forma revenue of $59 billion in 2014. That is 20 percent more than Schlumberger's revenue for 2014 and compares with $57.42 billion earned by the combine of Halliburton Co (HAL.N) and Baker Hughes Inc (BHI.N), Schlumberger's closest rivals. Halliburton and Baker Hughes agreed in November to merge, but the deal is yet to close as U.S. antitrust enforcers believe the $35 billion merger will lead to higher prices and less innovation, according to a Reuters source.
However, Schlumberger said it expects no antitrust hurdles and has no plans to divest any part of Cameron's portfolio to get regulatory clearance. "With SLB-CAM, there is not much in the way of overlapping businesses ... we do not envision an overly difficult antitrust review," Oppenheimer analyst James Schumm said. Schlumberger said it expects the deal to add to earnings by the end of the first year after the deal closes. The deal is expected to close in the first quarter of 2016.
