Zacks_Analysts' Blog : SLB-SII Merger Faces More Review - Analyst Blog

Schlumberger Ltd. (SLB) on Monday said that the Antitrust Division of the United States Department of Justice has requested for additional information related to the proposed merger with Smith International Inc. (SII). The additional information is also known as "second request".

 

Regulators usually scrutinize merger agreements in detail. As with the Smith–Schlumberger case, the Department has also issued multiple requests for information on another merger between Baker Hughes Inc. (BHI) and BJ Services Company (BJS).

 

In February, Schlumberger acquired lesser rival Smith for approximately $11 billion in an all-stock deal. While a definitive date for the closing of the transaction is yet be determined, Schlumberger expects it during the second half of this year.

Under the terms of the agreement, Smith shareholders will receive 0.6966 Schlumberger share in exchange for each Smith share. Based on closing prices for both companies on February 18, 2010, the deal places a value of $45.84 per Smith share, representing a 37.5% premium.

In addition to this pending merger, Schlumberger has also acquired France’s Geoservices Group in March for $1.07 billion. While the company continues to benefit from its superior products and services on the back of constant research and engineering efforts, a number of significant acquisitions recently have accelerated Schlumberger’s growth momentum.