DOJ Asks More Questions About Schlumberger-ChampionX Merger: Details
Portfolio Pulse from Lekha Gupta
The U.S. Department of Justice has issued a second request for information regarding Schlumberger's planned acquisition of ChampionX. The acquisition, approved by ChampionX stockholders, is expected to close in late 2024 or early 2025. Schlumberger anticipates $400 million in annual pretax synergies within three years post-closure. Additionally, Schlumberger has entered a 10-year partnership with TotalEnergies to develop digital energy solutions. Investors should consider macroeconomic factors and Schlumberger's performance relative to its peers.
July 03, 2024 | 10:28 am
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NEUTRAL IMPACT
ChampionX's acquisition by Schlumberger is under additional DOJ scrutiny, which could delay the deal. The acquisition was approved by ChampionX stockholders and is expected to bring significant synergies.
The DOJ's second request introduces uncertainty regarding the acquisition timeline. However, the approval by stockholders and expected synergies are positive aspects.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
IShares U.S. Oil Equipment & Services ETF, which includes exposure to Schlumberger, may experience volatility due to the DOJ's scrutiny of the Schlumberger-ChampionX merger.
The ETF's performance may be impacted by the uncertainty surrounding the Schlumberger-ChampionX merger, but the overall effect is likely to be moderate.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30
NEUTRAL IMPACT
VanEck Oil Services ETF, which includes exposure to Schlumberger, may experience volatility due to the DOJ's scrutiny of the Schlumberger-ChampionX merger.
The ETF's performance may be impacted by the uncertainty surrounding the Schlumberger-ChampionX merger, but the overall effect is likely to be moderate.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30
NEUTRAL IMPACT
Schlumberger's acquisition of ChampionX faces additional scrutiny from the DOJ, potentially delaying the deal. However, the company expects significant synergies post-closure and has entered a new partnership with TotalEnergies.
The DOJ's second request could delay the acquisition, creating uncertainty. However, the expected synergies and new partnership with TotalEnergies are positive indicators for future growth.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
TotalEnergies has entered a 10-year partnership with Schlumberger to develop digital energy solutions, which could enhance performance and efficiency.
The partnership with Schlumberger is likely to enhance TotalEnergies' technological capabilities and operational efficiency, which is positive for the company's future performance.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50