2010-08-31-2010-02-22-2010-08-30

Acquired oilfield services company Smith International, which employs more than 21,000 full-time personnel and operates in more than 80 countries.

Oilfield giant Schlumberger Ltd., Houston, (NYSE: SLB) has completed the acquisition of global drilling and completion company Smith International Inc., Houston, (NYSE: SII) for approximately $10.6 billion in a stock-for-stock transaction. The merger widens Schlumberger's lead as the world's largest oilfield services company based on revenue and market capitalization.

Schlumberger will pay 0.6966 share per Smith share, representing a 37.5% premium based on the closing prices on Feb. 18. The agreement places a value of $45.84 per Smith share. Schlumberger issued approximately 176 million shares pursuant to the merger, representing a transaction value of approximately $11 billion. Smith stockholders will own approximately 12.9% of Schlumberger's outstanding shares.

The two companies are joint-venture partners in drilling fluids company M-I Swaco, in which Smith is a 60% owner.

The Smith oilfield segment is comprised of drilling and completion services, including drill bits, directional drilling services and downhole tools. In addition, Smith's distribution segment consists of the Wilson distribution operations and a majority-owned interest in CE Franklin Ltd., a publicly-traded Canadian distribution company. Areas of operation include North and Latin America, Europe, Africa, the Middle East and Asia. Smith employs more than 21,000 full-time personnel and operates in more than 80 countries.

Schlumberger chief executive Andrew Gould says, "I am extremely pleased to welcome Smith employees, customers and shareholders to Schlumberger. We are ready to begin the process of realizing the synergies made possible by this merger and our focus in the near term is on the execution of plans that have been laid out these past few months while continuing to deliver safety and quality in our field operations. Beyond the near term, the merger will allow us to address new markets and develop new technologies, and employees from both companies will have key roles to play in unlocking the value brought by the combination."

Former Smith CEO John Yearwood says, "This is an exciting time for all the former Smith International employees as we aggressively expand our service offerings through the rapid implementation of the identified growth strategies while continuing to focus on our customers' everyday needs. The quality of the integration planning process has been outstanding and everyone is looking forward to exceeding expectations."

Schlumberger expects to realize incremental pretax synergies, after integration costs of approximately $160 million in 2011 and approximately $320 million in 2012. The company also expects the combination to be accretive to earnings per share in 2012.

Goldman, Sachs & Co. is financial advisor and Baker Botts LLP is legal counsel to Schlumberger. UBS Investment Bank is financial advisor and Wachtell, Lipton, Rosen & Katz is legal counsel to Smith International.