Schlumberger Finalizes $11 Billion Dollar Merger with Smith International

Schlumberger has closed its merger with Smith International. As previously announced, each Smith stockholder will receive 0.6966 shares of Schlumberger common stock in exchange for each Smith share, with cash paid in lieu of any fractional shares of Schlumberger common stock. Schlumberger has issued approximately 176 million shares pursuant to the merger, representing a transaction value of approximately $11 billion. As a result, former Smith stockholders own approximately 12.9% of Schlumberger's outstanding shares of common stock.

The merger widens Schlumberger's lead as the world's largest oilfield services company based on revenue and market capitalization. Smith's drilling technologies, other products and expertise complement a variety of Schlumberger technology offerings, while the geographical footprint of Schlumberger will enable the merged companies to extend joint offerings worldwide.

Andrew Gould, Chairman and Chief Executive Officer of Schlumberger, commented, "I am extremely pleased to welcome Smith employees, customers and shareholders to Schlumberger. We are ready to begin the process of realizing the synergies made possible by this merger and our focus in the near term is on the execution of plans that have been laid out these past few months while continuing to deliver safety and quality in our field operations. Beyond the near term, the merger will allow us to address new markets and develop new technologies, and employees from both companies will have key roles to play in unlocking the value brought by the combination."

John Yearwood, former Chief Executive Officer of Smith, said, "This is an exciting time for all the former Smith International employees as we aggressively expand our service offerings through the rapid implementation of the identified growth strategies while continuing to focus on our customers' everyday needs. The quality of the integration planning process has been outstanding and everyone is looking forward to exceeding expectations."


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Schlumberger To Buy Smith International In $11 Billion Dollar Deal

Schlumberger Ltd. (SLB) will acquire Smith International (SII) for about $11 billion in an all stock deal that is the year's largest acquisition and will make Schlumberger by far the world's biggest oilfield services company.

The deal, which the companies announced Sunday, will cement Schlumberger's position atop the oil services industry, which helps oil producers locate and drill for oil deposits. After the deal, Schlumberger, already the biggest company in the sector by revenue and market value, would have revenues double that of its nearest rival, Halliburton Co. (HAL), although most analysts expect Schlumberger to sell some assets for antitrust or other reasons.

Under the terms of the deal, Smith shareholders will receive 0.6966 Schlumberger share for each Smith share they own, a 37.5% premium over Smith's share price on Thursday, when news of the deal was first reported. The deal, which must still be approved by shareholders of both companies, is expected to close in the second half of this year. Smith shareholders would own about 12.8% of the combined company.

The $11 billion price tag, which values Smith at $44.51 per share based on Friday's close, was higher than most analysts expected. Dan Pickering, an analyst for energy focused investment bank Tudor Pickering Holt & Co., said some Schlumberger shareholders might also have preferred a cash and stock deal to an all stock deal. But he said the deal makes sense for Schlumberger, which will now be able to package Smith's products with its own services to win more business.


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