From the Chronicle:
Is energy merger the first domino?
Deal between Schlumberger and drill bits maker may be a catalyst for diversification among companies here
Schlumberger, the world’s largest oil field services company, announced an $11 billion merger Sunday with Houston-based drill bits maker Smith International, in a mammoth deal for the sector that could touch off a new round of mergers with the potential to reshape Houston’s corporate landscape.
With the all-stock merger, Smith International, which employed more than 3,700 people in Houston around this time last year, will be subsumed into the giant international conglomerate because of its expertise in drill bits.
“Smith’s drilling technologies, other products and expertise complement our own, while the geographical footprint of Schlumberger means we can extend our joint offerings worldwide,” Schlumberger CEO Andrew Gould said in a statement. Sclumberger’s principal offices are in Paris, Houston and The Hague.
Neither company commented directly in a conference call this morning about the number of potential job cuts. But Schlumberger Chief Financial Officer Simon Ayat said cost savings of up to $160 million next year and $320 million in 2012 would be found in the corporate structure of the two firms.
“We have a lot of overlap,” Ayat said. “We operate in many areas where we have our own structures and facilities and Smith has the same thing [in terms of] support functions.”>>>MORE
From BusinessWire via Forbes:Robbins Umeda LLP Announces an Investigation of the Acquisition of Smith International, Inc. by...
Robbins Umeda LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by the Board of Directors of Smith International, Inc. ("Smith") in connection with their actions in causing Smith to enter into a merger agreement with Schlumberger Limited ("Schlumberger"). Under the terms of the offer, Smith shareholders will receive 0.6966 shares of Schlumberger in exchange for each Smith share they hold.
Robbins Umeda LLP's investigation concerns whether Smith's Board of Director's acceptance and recommendation of Schlumberger's offer was fair and designed to secure the best possible price for all Smith shareholders....MORE