Schlumberger Ltd will buy oilfield equipment maker Cameron International Corp in a deal valued at $14.8 billion to streamline supply chains and offer cost-effective services to oil and gas customers who have slashed budgets. The deal is the latest example of energy companies joining forces to help them cope with slumping oil prices, down 60 percent since June last year and hitting new lows each day.
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. The two companies already have a joint venture since November 2012 aimed at deep water drilling services. “The deal should allow a 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 proforma revenue of $59 billion in 2014. That is 20 per cent more than Schlumberger’s revenue for 2014 and compares with $57.42 billion earned by the combine of Halliburton Co and Baker Hughes Inc, Schlumberger’s closest rivals. Halliburton and Baker Hughes agreed in November to merge, but the deal is yet to close as US antitrust enforcers believe the $35 billion mergers will lead to higher prices and less innovation, according to a Reuters source.