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Schlumberger Announces Smith Acquisition

Leading oilfield services company Schlumberger plans to buy competitor Smith International for $10.6 billion in an all-stock deal.
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Updated from Feb. 21



) --


(SLB) - Get Schlumberger NV Report

plans to acquire

Smith International


in a deal valued at $10.6 billion, the companies announced Sunday.

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Schlumberger already dominates the oilfield services sector, and the Smith acquisition will put it further ahead of the pack.

Boards of both companies have approved the all-stock transaction, under which Smith shareholders will receive 0.6966 shares of Schlumberger in exchange for each Smith share they hold.

Schlumberger shares closed Thursday at $65.81. Based on that level, the deal will value each Smith share at $45.84, a 37.5% premium to their $33.35 Thursday closing level.

On Friday Smith's shares rallied and Schlumberger's after a

Wall Street Journal

report that the two companies were in merger talks.

Upon the deal's close, Smith stockholders collectively will own approximately 12.8% of Schlumberger's outstanding shares of common stock.

Schlumberger said it expects to realize incremental pretax benefits -- after integration costs -- of approximately $160 million in 2011 and approximately $320 million in 2012.

Schlumberger also said it expects the combination to be accretive to earnings per share in 2012.

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This article was written by a staff member of