Updated from Feb. 21
plans to acquire
in a deal valued at $10.6 billion, the companies announced Sunday.
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 TheStreet.com.