UK Regulator Reviews SLB’s Acquisition of ChampionX for Potential Competition Risks

The UK’s Competition and Markets Authority (CMA) has initiated an inquiry into SLB’s proposed $8 billion acquisition of smaller oilfield services firm ChampionX, according to Reuters. The regulator aims to assess whether the deal, first announced in April 2023, could lead to competition concerns within UK markets.

As part of its review, the CMA has set a deadline of March 27 for its Phase 1 decision. However, per Reuters, analysts at ATB Capital Markets have noted that this timeline is not fixed and could change. If the CMA opts to proceed with a more in-depth Phase 2 investigation, the transaction’s completion could face further delays.

SLB has previously stated that it anticipates regulatory approval for the merger to be finalized closer to the first quarter of 2025. Nonetheless, recent trends suggest that oil and gas sector deals have encountered setbacks due to increased scrutiny from regulators. According to Reuters, since the surge in industry consolidations began in 2023, several transactions have been prolonged by additional information requests from antitrust authorities.

Notably, the U.S. Department of Justice (DOJ) issued a second request for further details regarding the SLB-ChampionX deal last year, further extending the regulatory review process. Analysts have indicated that heightened regulatory oversight could continue to impact the timeline of this and similar transactions.

Source: Reuters