ChampionX Faces CMA Scrutiny in $8bn SLB Acquisition
Deal News | Jan 30, 2025 | EIN
The UK's Competition and Markets Authority (CMA) has launched an investigation into SLB's proposed $8 billion acquisition of oilfield technology provider ChampionX. The CMA's scrutiny, prompted by potential competition issues in UK markets, has set a deadline for its preliminary phase one decision by March 27, 2025. SLB expects clearance for the acquisition in the first quarter of 2025. Analysts from ATB Capital Markets have indicated that timelines can alter if a phase two investigation is initiated. This investigation follows a second request by the US Department of Justice concerning the deal, reflecting a trend of delayed transactions triggered by antitrust concerns amid a wave of consolidations since 2023. In April 2024, SLB signed a definitive agreement to acquire ChampionX in an all-stock transaction, receiving unanimous approval from ChampionX's board. ChampionX shareholders are set to receive 0.735 SLB shares per ChampionX share, amounting to a 9% ownership in SLB post-acquisition. Additionally, ChampionX announced a plan to acquire RMSpumptools for roughly $108.7 million in March 2024.
Sectors
- Oilfield Services
- Competition Law
Geography
- United Kingdom – The UK's Competition and Markets Authority is conducting the investigation, indicating the geographical focus on the UK market's competition environment.
- United States – US Department of Justice has requested additional information, showing the transaction's impact and scrutiny in the United States as well.
Industry
- Oilfield Services – SLB and ChampionX are major players in the oilfield services industry, providing technological and logistical services to the oil and gas sector.
- Competition Law – The investigation by the CMA and similar actions by the US DOJ highlight regulatory concerns regarding competition law and antitrust issues in large acquisitions.
Financials
- $8 billion – The value of SLB's proposed acquisition of ChampionX.
- $108.7 million – The value of ChampionX's acquisition of RMSpumptools.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| SLB | Bidding Company | Company | An oilfield services giant proposing to acquire ChampionX. |
| ChampionX | Target Company | Company | An oilfield technology provider targeted for acquisition by SLB. |
| UK's Competition and Markets Authority (CMA) | Government | Government | The regulatory authority conducting the investigation into the acquisition. |
| US Department of Justice | Government | Government | US regulatory body that has shown interest in the transaction by requesting additional information. |
| ATB Capital Markets | Other Company - Analyst | Company | Provided analysis on the potential impacts of the CMA's timelines on the transaction. |
| RMSpumptools | Other Company | Company | Company acquired by ChampionX for approximately $108.7 million. |