ChampionX, Schlumberger Shares Move In Opposite Directions After $8B Deal Announcement
Portfolio Pulse from Lekha Gupta
ChampionX Corp. (NASDAQ:CHX) shares rose after announcing an all-stock acquisition deal with Schlumberger Ltd. (NYSE:SLB), where ChampionX shareholders will receive 0.735 shares of Schlumberger for each ChampionX share, owning about 9% of Schlumberger post-deal. Schlumberger expects $400 million in annual pretax synergies within three years post-closure, aiming to close the transaction before 2024. Schlumberger plans to return $7 billion to shareholders over the next two years, with increased returns in 2024 and 2025. The deal aligns with Schlumberger's strategy to meet energy demand and accelerate decarbonization. Exposure to both companies can be gained through Invesco Oil & Gas Services ETF (NYSE:PXJ), VanEck Oil Services ETF (NYSE:OIH), and iShares U.S. Oil Equipment & Services ETF (NYSE:IEZ). CHX shares are up 8.45%, while SLB shares are down 2.68%.
April 02, 2024 | 5:56 pm
News sentiment analysis
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POSITIVE IMPACT
ChampionX shares rose 8.45% following the announcement of an all-stock acquisition deal by Schlumberger, indicating positive investor sentiment.
The rise in ChampionX shares suggests investors are optimistic about the acquisition's potential benefits, including the expected synergies and the strategic fit with Schlumberger's decarbonization goals.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
iShares U.S. Oil Equipment & Services ETF, with exposure to ChampionX and Schlumberger, may see shifts in investor interest following the merger announcement.
As the ETF includes both companies, the merger news could lead to increased investor interest, seeking to capitalize on the potential synergies and strategic benefits of the acquisition.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Invesco Oil & Gas Services ETF, which includes exposure to ChampionX and Schlumberger, may see increased interest following the acquisition news.
Given the ETF's exposure to both companies, the acquisition news could lead to increased trading activity and interest in PXJ as investors look to gain exposure to the evolving dynamics in the oil services sector.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
VanEck Oil Services ETF, holding shares of both ChampionX and Schlumberger, might experience volatility as the market digests the acquisition details.
The ETF's exposure to both companies involved in the merger could lead to mixed reactions in the short term, as investors assess the long-term implications of the deal on the sector.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
Schlumberger shares fell 2.68% after the acquisition announcement, possibly due to concerns over the short-term costs and dilution effects of the deal.
The decline in Schlumberger shares may reflect investor concerns about the immediate financial impact of the acquisition, including the dilution of shares and the costs associated with achieving the projected synergies.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90