DEFM14A
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

 

 

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

ChampionX Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 


Table of Contents

LOGO

MERGER PROPOSAL—YOUR VOTE IS VERY IMPORTANT

 

 

To the ChampionX Corporation stockholders:

As previously announced, ChampionX Corporation (“ChampionX”), a Delaware corporation, Schlumberger Limited, a Curaçao corporation (“SLB”), Sodium Holdco, Inc., a Delaware corporation and indirect wholly owned subsidiary of SLB (“Holdco”), and Sodium Merger Sub, Inc., a Delaware corporation and indirect wholly owned subsidiary of SLB and direct wholly owned subsidiary of Holdco (“Merger Sub”), have entered into an Agreement and Plan of Merger, dated as of April 2, 2024 (the “Merger Agreement”), pursuant to which SLB will acquire ChampionX in an all-stock transaction by means of a merger of Merger Sub with and into ChampionX (the “Merger,” together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with ChampionX surviving the Merger as an indirect wholly owned subsidiary of SLB.

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”) and by virtue of the Merger, each share of common stock, par value $0.01 per share, of ChampionX (“ChampionX common stock”) issued and outstanding immediately prior to the Effective Time (other than shares of ChampionX common stock held in treasury of ChampionX or held by SLB, Holdco or any direct or indirect wholly owned subsidiary of SLB, in each case except for any shares held on behalf of third parties (“ChampionX Excluded Stock”)) will be converted, without any action on the part of the holder thereof, into the right to receive 0.735 shares of common stock (the “Exchange Ratio”), par value $0.01 per share, of SLB (“SLB common stock”), which shares will be duly authorized and validly issued in accordance with applicable laws (the “Equity Consideration”), and, if applicable, cash in lieu of fractional shares.

The Exchange Ratio is fixed and will not be adjusted to reflect price changes prior to the closing of the Merger. SLB common stock is listed on the New York Stock Exchange (“NYSE”) under the trading symbol “SLB,” and ChampionX common stock is listed on The Nasdaq Stock Market (“Nasdaq”) under the trading symbol “CHX.” Based on the closing price of SLB common stock on the NYSE on April 1, 2024, the last trading day before the public announcement of the Merger Agreement, the Exchange Ratio represented approximately $40.59 in value for each share of ChampionX common stock. This amount represented a premium of approximately 14.7% to the closing price of ChampionX common stock on Nasdaq on April 1, 2024. Based on the closing price of SLB common stock on the NYSE of $48.62 on May 14, 2024, the latest practicable trading day before the date of this proxy statement/prospectus, the Exchange Ratio represented approximately $35.74 per share in value for each share of ChampionX common stock.

The value of the consideration paid to ChampionX stockholders will fluctuate with changes in the market price of SLB common stock. We encourage you to obtain current market quotations of SLB common stock, given that the Equity Consideration is payable in SLB common stock, and ChampionX common stock.

Based on the number of outstanding shares of ChampionX common stock (including each share of ChampionX common stock underlying each deferred stock unit award of ChampionX) on the record date of May 14, 2024 for the ChampionX Special Meeting (defined below), we anticipate that SLB will issue approximately 140,076,251 shares of SLB common stock in connection with the Merger.

Upon completion of the Merger, based on the number of outstanding shares of ChampionX common stock and SLB common stock as of the date of the Merger Agreement, we estimate that former ChampionX stockholders will own approximately 9% of the outstanding shares of SLB common stock and current SLB shareholders will own approximately 91% of the outstanding shares of SLB common stock.

In connection with the Merger, ChampionX will hold a virtual special meeting of ChampionX stockholders (the “ChampionX Special Meeting”) to consider and vote on (1) a proposal to adopt the Merger Agreement (the “Merger Proposal”); (2) a proposal to approve, by non-binding, advisory vote, the compensation that may become payable to ChampionX’s named executive officers in connection with the Merger (the “Compensation Proposal”); and (3) a proposal to approve the adjournment of the ChampionX Special Meeting, if necessary, (a) to solicit additional proxies in favor of the Merger Proposal if (i) there are holders of an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum at such meeting or (ii) there are insufficient votes at the time of such adjournment to approve the Merger Proposal or (b) to allow reasonable additional time for the filing and mailing of any required supplement or amendment to the accompanying proxy statement/prospectus, and the review of such materials by ChampionX stockholders (the “Adjournment Proposal”).

Your vote is important. The record date for determining the ChampionX stockholders entitled to receive notice of, and to vote at, the ChampionX Special Meeting is the close of business on May 14, 2024. The Merger cannot be consummated unless the Merger Agreement is approved by the affirmative vote of the holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting. ABSTENTIONS, A BROKER NON-VOTE OR A FAILURE TO VOTE WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THE MERGER PROPOSAL.

The board of directors of ChampionX (the “ChampionX Board”) has unanimously (i) determined the Merger Agreement and the consummation of the Merger and the Transactions to be fair to and in the best interests of ChampionX and its stockholders, (ii) declared the Merger Agreement and the consummation of the Transactions, including the Merger, to be advisable, (iii) authorized and approved the Merger Agreement, including the execution, delivery and performance thereof, (iv) directed that the Merger Agreement be submitted to the ChampionX stockholders for their consideration and adoption and (v) recommended the ChampionX stockholders adopt the Merger Agreement. ACCORDINGLY, THE CHAMPIONX BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE MERGER PROPOSAL, A VOTE “FOR” THE COMPENSATION PROPOSAL AND A VOTE “FOR” THE ADJOURNMENT PROPOSAL.

We urge you to read this proxy statement/prospectus carefully. The obligations of SLB and ChampionX to consummate the Merger are subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement. More information about SLB, ChampionX, the ChampionX Special Meeting, the Merger Agreement and the Transactions, including the Merger, is included in this proxy statement/prospectus. You should also consider carefully the risks that are described in the Risk Factors section of this proxy statement/prospectus, beginning on page 24. If you have any questions regarding this proxy statement/prospectus, you may contact D.F. King & Co., Inc., ChampionX’s proxy solicitor, by calling toll-free at (866) 416-0577.

Thank you for your continued support of and interest in ChampionX. We at ChampionX look forward to the successful combination of ChampionX and SLB.

 

Very truly yours,
LOGO

Daniel W. Rabun

Chairman

ChampionX Corporation

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this proxy statement/prospectus or determined if this proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated May 15, 2024 and is first being mailed to ChampionX stockholders on or about May 15, 2024.


Table of Contents

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

OF

CHAMPIONX CORPORATION

TO BE HELD ON JUNE 18, 2024

To the ChampionX Corporation stockholders:

On behalf of the Board of Directors (the “ChampionX Board”) of ChampionX Corporation (“ChampionX”), we cordially invite you to attend a special meeting of ChampionX stockholders at https://meetnow.global/M6YL2F7, starting at 9:00 a.m. Central Time on June 18, 2024 (unless it is adjourned or postponed to a later date) (the “ChampionX Special Meeting”). The ChampionX Special Meeting will be virtual, conducted exclusively via live webcast accessible at https://meetnow.global/M6YL2F7. We believe that a virtual meeting provides easier and greater access to the meeting, which enables participation by the broadest number of stockholders. To be admitted to the ChampionX Special Meeting, ChampionX stockholders must enter the 15-digit control number found on their proxy card. ChampionX stockholders whose stock is held in a stock brokerage account or by a bank or other nominee must register in advance to attend the ChampionX Special Meeting. To register, each such ChampionX stockholder must request proof of their proxy power reflecting their ChampionX holdings from their broker or other nominee and submit it along with their name and email address to Computershare, ChampionX’s transfer agent. Requests for registration must be labeled “Legal Proxy” and be received no later than June 13, 2024 by 5:00 p.m. Eastern Time. Such ChampionX stockholders will receive confirmation of their registration by email after Computershare receives their registration materials. Registration materials and information should be sent: by email to legalproxy@computershare.com; or by mail to Computershare, ChampionX Legal Proxy, P.O. Box 43001, Providence, RI 02940-300.

The ChampionX Board has fixed the close of business on May 14, 2024 as the record date for determination of ChampionX stockholders entitled to attend and vote on the matters presented at the ChampionX Special Meeting.

At the ChampionX Special Meeting, ChampionX stockholders will be asked to consider and act on the following proposals:

 

  1.

To adopt the Agreement and Plan of Merger, dated as of April 2, 2024 (the “Merger Agreement”), by and among ChampionX, Schlumberger Limited, a Curaçao corporation (“SLB”), Sodium Holdco, Inc., a Delaware corporation and indirect wholly owned subsidiary of SLB (“Holdco”), and Sodium Merger Sub, Inc., a Delaware corporation and indirect wholly owned subsidiary of SLB and direct wholly owned subsidiary of Holdco (“Merger Sub”), a copy of which is included as Annex A to the proxy statement/prospectus of which this notice forms a part, pursuant to which (i) Merger Sub will merge with and into ChampionX (the “Merger” and the effective time of the Merger, the “Effective Time,” and the Merger together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with ChampionX surviving the Merger as an indirect wholly owned subsidiary of SLB (the “Merger Proposal”), and (ii) at the Effective Time, ChampionX’s certificate of incorporation will be amended and restated in its entirety in the form set forth on Exhibit A to the Merger Agreement, which will be the certificate of incorporation of ChampionX until thereafter amended in accordance with its terms and applicable law;

 

  2.

To approve, by non-binding, advisory vote, the compensation that may become payable to ChampionX’s named executive officers in connection with the Merger (the “Compensation Proposal”); and

 

  3.

To approve the adjournment of the ChampionX Special Meeting, if necessary, (1) to solicit additional proxies in favor of the Merger Proposal if (a) there are holders of an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum at such meeting or (b) there are insufficient votes at the time of such adjournment to approve the Merger Proposal or (2) to allow reasonable additional time for the filing and mailing of any required supplement or amendment to the accompanying proxy statement/prospectus, and the review of such materials by ChampionX stockholders (the “Adjournment Proposal”).

These proposals are fully described in the accompanying proxy statement/prospectus, which also describes other matters contemplated in connection with the Merger. Before voting, please carefully read the proxy statement/prospectus in its


Table of Contents

entirety, including the Merger Agreement and all other annexes, and including documents incorporated by reference, for further information relevant to the business to be transacted at the ChampionX Special Meeting. In particular, please see (i) the section of the proxy statement/prospectus entitled “The Merger Agreement,” which is incorporated into this notice by reference, for a description of the Merger Agreement and Transactions, including the Merger, (ii) the section of the proxy statement/prospectus entitled “Risk Factors,” for an explanation of the risks associated with the Merger Agreement and the Transactions, including the Merger, (iii) the copy of the Merger Agreement which is included as Annex A to the proxy statement/prospectus, which is incorporated into this notice by reference and (iv) the form of Certificate of Incorporation of Surviving Corporation included as Exhibit A to the Merger Agreement included as Annex A to the proxy statement/prospectus, which is incorporated into this notice by reference.

The ChampionX Board has unanimously (i) determined the Merger Agreement and the consummation of the Merger and the Transactions to be fair to and in the best interests of ChampionX and its stockholders, (ii) declared the Merger Agreement and the consummation of the Transactions, including the Merger, to be advisable, (iii) authorized and approved the Merger Agreement, including the execution, delivery and performance thereof, (iv) directed that the Merger Agreement be submitted to the ChampionX stockholders for their consideration and adoption and (v) recommended the ChampionX stockholders adopt the Merger Agreement. ACCORDINGLY, THE CHAMPIONX BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE MERGER PROPOSAL, A VOTE “FOR” THE COMPENSATION PROPOSAL AND A VOTE “FOR” THE ADJOURNMENT PROPOSAL.

The Merger cannot be consummated unless the Merger Agreement is adopted by the affirmative vote of the holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting. ABSTENTIONS, A BROKER NON-VOTE OR A FAILURE TO VOTE WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THE MERGER PROPOSAL.

YOUR VOTE IS IMPORTANT. APPROVAL OF THE MERGER PROPOSAL BY THE CHAMPIONX STOCKHOLDERS IS A CONDITION TO THE CONSUMMATION OF THE MERGER AND REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF CHAMPIONX COMMON STOCK ENTITLED TO VOTE AT THE CHAMPIONX SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO PARTICIPATE IN THE CHAMPIONX SPECIAL MEETING, PLEASE FOLLOW THE INSTRUCTIONS ON YOUR PROXY CARD TO VOTE BY MAIL, TELEPHONE OR INTERNET AS PROMPTLY AS POSSIBLE. IF YOUR SHARES ARE HELD IN THE NAME OF A BROKER OR CUSTODIAN, PLEASE FOLLOW THE VOTING INSTRUCTIONS PROVIDED BY SUCH BROKER OR CUSTODIAN.

The enclosed proxy statement/prospectus provides a detailed description of the Merger, the Merger Agreement and the other matters to be considered at the ChampionX Special Meeting. We urge you to read the proxy statement/prospectus carefully. The obligations of SLB and ChampionX to consummate the Merger are subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement. More information about SLB, ChampionX, the ChampionX Special Meeting, the Merger Agreement and the Transactions, including the Merger, is included in the proxy statement/prospectus. You should also consider carefully the risks that are described in the “Risk Factors” section of the proxy statement/prospectus.

If you have any questions concerning the Merger Agreement or the Transactions, including the Merger, or the accompanying proxy statement/prospectus or would like additional copies of the proxy statement/prospectus or the documents incorporated by reference into the proxy statement/prospectus, you may contact D.F. King & Co., Inc., ChampionX’s proxy solicitor, at the address, telephone numbers and email listed below. You will not be charged for any of these documents that you request.

D.F. KING & CO., INC.

48 Wall Street – 22nd Floor

New York, NY 10005

Banks and Brokers Call Collect: (212) 269-5550

Stockholders Please Call Toll-Free: (866) 416-0577

By email: championx@dfking.com


Table of Contents

On behalf of the ChampionX Board and our management team, I extend our appreciation for your support.

 

LOGO

JULIA WRIGHT

Senior Vice President, General Counsel & Secretary

ChampionX Corporation


Table of Contents

REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information about SLB and ChampionX from other documents that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge. You can obtain copies of the documents incorporated by reference into this proxy statement/prospectus through the Securities and Exchange Commission (sometimes referred to as the SEC) website at www.sec.gov or by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:

 

SLB

Investor Relations

5599 San Felipe

Houston, Texas 77056

(713) 375-3535

 

ChampionX Corporation

2445 Technology Forest Blvd.

Building 4, 12th Floor

The Woodlands, Texas 77381

(281) 403-5772

In addition, you may also obtain additional copies of this proxy statement/prospectus or the documents incorporated by reference into this proxy statement/prospectus by contacting D.F. King & Co., Inc. (“D.F. King”), ChampionX’s proxy solicitor, at the address and telephone numbers listed below. You will not be charged for any of these documents that you request.

D.F. King & Co., Inc.

48 Wall Street 22nd Floor

New York, NY 10005

Banks and Brokers Call Collect: (212) 269-5550

All Others Please Call Toll-Free: (866) 416-0577

By email: championx@dfking.com

In order to receive timely delivery of the documents in advance of the ChampionX Special Meeting, your request should be received no later than June 7, 2024. If you request any documents, ChampionX will mail them to you by first class mail, or another equally prompt means, within one business day after receipt of your request.

See the section entitled “Where You Can Find More Information” of this proxy statement/prospectus.

SUBMITTING PROXIES BY MAIL, TELEPHONE OR INTERNET

ChampionX stockholders of record may submit their proxies:

 

   

by telephone (within the United States, U.S. territories and Canada) using the toll-free telephone number listed on the enclosed proxy card;

 

   

through the Internet by logging onto the website indicated on the enclosed proxy card and following the prompts using the Control Number located on the proxy card; or

 

   

by mail, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided:

ChampionX stockholders whose shares are held in “street name” must provide their broker, nominee, fiduciary or other custodian with instructions on how to vote their shares; otherwise, their broker, nominee, fiduciary or other custodian will not vote their shares on any of the proposals before the ChampionX Special Meeting. ChampionX stockholders should check the voting form provided by their broker, nominee, fiduciary or other custodian for instructions on how to vote their shares.


Table of Contents

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the Securities and Exchange Commission (the “SEC”) by SLB, constitutes a prospectus of SLB under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) with respect to the shares of common stock of SLB, par value $0.01 per share (“SLB common stock”), to be issued to the holders (the “ChampionX stockholders”) of shares of common stock, par value $0.01 per share, of ChampionX (“ChampionX common stock”) pursuant to the Agreement and Plan of Merger, dated as of April 2, 2024 (as amended from time to time, the “Merger Agreement”), by and among SLB, Sodium Holdco, Inc. (“Holdco”), Sodium Merger Sub, Inc. (“Merger Sub”), and ChampionX.

This document also constitutes a notice of meeting and proxy statement of ChampionX under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. SLB has supplied all information contained or incorporated by reference herein relating to SLB, and ChampionX has supplied all information contained herein or attached hereto relating to ChampionX. SLB and ChampionX have both contributed to the information relating to the Merger and the Merger Agreement contained in this proxy statement/prospectus.

You should rely only on the information contained in, attached to or incorporated by reference herein in connection with any vote, the giving or withholding of any proxy or any investment decision in connection with the Merger Agreement. SLB and ChampionX have not authorized anyone to provide you with information that is different from that contained in, attached to or incorporated by reference herein. This proxy statement/prospectus is dated May 15, 2024, and you should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein. Further, you should not assume that the information incorporated by reference herein or attached hereto is accurate as of any date other than the date of the incorporated or attached document. Neither the mailing of this proxy statement/prospectus to ChampionX stockholders, nor the issuance by SLB of shares of SLB common stock pursuant to the Merger Agreement, will create any implication to the contrary.

All currency amounts referenced in this proxy statement/prospectus are in U.S. dollars.

All references in this proxy statement/prospectus to:

 

   

“Adjusted EBIT” refer to net income (loss) plus (i) interest expense, net, (ii) foreign currency transaction losses (gains), net and (iii) provision for income taxes;

 

   

“Adjusted EBITDA” refer to net income (loss) plus (i) depreciation and amortization, (ii) interest expense, net, (iii) foreign currency transaction losses (gains), net and (iv) provision for income taxes;

 

   

“Applicable Performance Level” refer to (i) with respect to ChampionX Performance Share Awards with a performance period commencing as of January 1, 2022, the greater of (A) the target performance level and (B) the actual performance level attained as of the Effective Time (based on actual achievement of applicable performance goals, as reasonably determined by the ChampionX Board in the ordinary course of business consistent with past practice), (ii) for ChampionX Performance Share Awards with a performance period commencing as of January 1, 2023 or January 1, 2024, 120% of the target performance level and (iii) if applicable, with respect to ChampionX Performance Share Awards with a performance period commencing as of January 1, 2025, the actual performance level attained as of the Effective Time (based on actual achievement of applicable performance goals, as reasonably determined by the ChampionX Board in the ordinary course of business consistent with past practice);

 

   

“ChampionX” refer to ChampionX Corporation, a Delaware corporation;

 

   

“ChampionX Board” refer to the board of directors of ChampionX;


Table of Contents
   

“ChampionX Closing Price” refer to the volume-weighted average closing sale price of a share of ChampionX common stock as reported on the Nasdaq for the 15 consecutive full trading days ending at the close of trading on the full trading day immediately preceding the closing date;

 

   

“ChampionX common stock” refer to common stock, par value $0.01 per share, of ChampionX;

 

   

“ChampionX DER” refer to an award of dividend equivalents rights of ChampionX common stock;

 

   

“ChampionX DSU” refer to a deferred stock unit granted under the ChampionX Equity Plan covering shares of ChampionX common stock;

 

   

“ChampionX DSU Award” refer to an award of ChampionX DSUs;

 

   

“ChampionX Equity Award” refer to each ChampionX DSU Award, ChampionX Option, ChampionX Performance Share Award, ChampionX RSU Award and ChampionX SAR;

 

   

“ChampionX Equity Plan” refer to the ChampionX Amended and Restated 2018 Equity and Cash Incentive Plan (effective as of February 18, 2021);

 

   

“ChampionX Excluded Stock” refer to shares of ChampionX common stock held in treasury of ChampionX or held by SLB, Holdco or any direct or indirect wholly owned subsidiary of SLB, in each case except for any shares held on behalf of third parties;

 

   

“ChampionX Option” refer to an option to purchase shares of ChampionX common stock granted under the ChampionX Equity Plan;

 

   

“ChampionX Performance Share” refer to performance shares granted under the ChampionX Equity Plan covering shares of ChampionX common stock;

 

   

“ChampionX Performance Share Award” refer to an award of ChampionX Performance Shares;

 

   

“ChampionX Pre-Closing Dividend Amount” refer to, with respect to a ChampionX RSU Award, the amount accrued in a bookkeeping account as of immediately prior to the closing with respect to ChampionX DERs granted in tandem with ChampionX RSU Award;

 

   

“ChampionX RSU” refer to a restricted stock unit granted under the ChampionX Equity Plan covering shares of ChampionX common stock;

 

   

“ChampionX RSU Award” refer to an award of ChampionX RSUs;

 

   

“ChampionX SAR” refer to a stock appreciation right with respect to shares of ChampionX common stock granted under the ChampionX Equity Plan;

 

   

“ChampionX Special Meeting” refer to the meeting of the ChampionX stockholders to be held in connection with the Merger, as may be adjourned or postponed from time to time;

 

   

“ChampionX stockholders” refer to holders of ChampionX common stock;

 

   

“Combined Company” refer to SLB, the Surviving Corporation and their subsidiaries after giving effect to the Merger;

 

   

“Delaware law” refer to the applicable provisions of the Delaware General Corporation Law;

 

   

“Equity Consideration” refer to 0.735 shares of SLB common stock that will be issued to eligible ChampionX stockholders in connection with the Merger in exchange for each share of ChampionX common stock outstanding;

 

   

“Exchange Ratio” refer to 0.735 shares of SLB common stock to be exchanged for each share of ChampionX common stock in the Merger;

 

   

“Holdco” refer to Sodium Holdco, Inc., a Delaware corporation and indirect wholly owned subsidiary of SLB;

 

   

“Merger” refer to the merger of Merger Sub with and into ChampionX upon the terms and subject to the conditions set forth in the Merger Agreement;

 

   

“Merger Agreement” refer to the Agreement and Plan of Merger, dated as of April 2, 2024, by and among SLB, Holdco, Merger Sub, and ChampionX;


Table of Contents
   

“Merger Sub” refer to Sodium Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Holdco;

 

   

“SLB” refer to Schlumberger Limited, a Curaçao corporation;

 

   

“SLB Board” refer to the board of directors of SLB;

 

   

“SLB common stock” refer to common stock, par value $0.01 per share, of SLB;

 

   

“Surviving Corporation” refer to ChampionX after the Merger, as a result of which the separate existence of Merger Sub shall cease and ChampionX shall continue its existence under Delaware law as the surviving corporation and as a direct wholly owned subsidiary of Holdco; and

 

   

“Transactions” refer to the transactions contemplated by the Merger Agreement, including the Merger.


Table of Contents

TABLE OF CONTENTS

 

     Page  

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE CHAMPIONX SPECIAL MEETING

     1  

SUMMARY

     10  

The Companies

     10  

The Merger

     11  

Risk Factors

     11  

The ChampionX Special Meeting

     13  

SLB Shareholder Approval Is Not Required

     14  

Treatment of Equity Awards

     14  

Opinion of ChampionX’s Financial Advisor

     15  

Interests of ChampionX’s Directors and Executive Officers in the Merger

     16  

Ownership of SLB After the Merger

     16  

Listing of SLB Stock and Delisting and Deregistration of ChampionX Stock

     16  

Appraisal Rights

     17  

Completion of the Merger Is Subject to Certain Conditions

     17  

Regulatory Approvals Required for the Merger

     18  

No Solicitation by ChampionX

     19  

No Change of Recommendation by ChampionX

     19  

Termination of the Merger Agreement

     19  

Termination Fee and Expenses

     20  

Payment of Dividends

     21  

Material U.S. Federal Income Tax Consequences of the Merger

     21  

Accounting Treatment

     22  

Exchange of Shares

     22  

Comparison of Rights of SLB Shareholders and ChampionX Stockholders

     22  

Comparative Per Share Market Price And Dividend Information

     22  

RISK FACTORS

     24  

Risks Relating to the Merger

     24  

Risks Relating to the Combined Company Upon Completion of the Merger

     29  

Tax Risks Related to the Merger

     33  

Other Risks Relating to ChampionX and SLB

     33  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     34  

THE COMPANIES

     37  

ChampionX Corporation

     37  

Schlumberger Limited (Schlumberger N.V.)

     37  

Sodium Holdco, Inc.

     38  

Sodium Merger Sub, Inc.

     38  

THE CHAMPIONX SPECIAL MEETING

     39  

Date, Time and Place

     39  

Participating in the Special Meeting

     39  

Purpose of the Special Meeting

     40  

Recommendation of the ChampionX Board of Directors

     40  

Record Date; Stockholders Entitled to Vote

     40  

Quorum

     41  

Vote Required for Approval

     41  

Failure to Vote; Abstentions; Broker Non-Votes

     41  

How to Vote

     42  

 

i


Table of Contents
     Page  

Revocation of Proxies

     43  

Adjournments and Postponements

     43  

Solicitation of Proxies

     44  

Questions and Additional Information

     44  

PROPOSAL 1: THE MERGER PROPOSAL

     45  

The Merger Proposal

     45  

Vote Required for Approval

     45  

Recommendation of the ChampionX Board

     45  

PROPOSAL 2: THE COMPENSATION PROPOSAL

     46  

The Compensation Proposal

     46  

Vote Required for Approval

     46  

Recommendation of the ChampionX Board

     46  

PROPOSAL 3: THE ADJOURNMENT PROPOSAL

     47  

The Adjournment Proposal

     47  

Vote Required for Approval

     47  

Recommendation of the ChampionX Board

     47  

THE MERGER

     48  

Structure of the Merger

     48  

Background of the Merger

     48  

ChampionX’s Reasons for the Merger; Recommendation of the ChampionX Board of Directors

     58  

SLB’s Reasons for the Merger

     63  

Listing of SLB Common Stock and Delisting and Deregistration of ChampionX Common Stock

     63  

Opinion of ChampionX’s Financial Advisor

     64  

Certain Unaudited Forecasted Financial Information

     70  

Interests of ChampionX’s Directors and Executive Officers in the Merger

     74  

Treatment of ChampionX Equity Awards in the Merger

     74  

Indemnification and Insurance

     80  

Appraisal Rights

     80  

Restrictions on Sales of Shares of SLB Common Stock Received in the Merger

     80  

Accounting Treatment

     80  

Material U.S. Federal Income Tax Consequences

     80  

Regulatory Approvals Required for the Merger

     87  

Dividend Policy

     88  

Closing and Effective Time

     89  

THE MERGER AGREEMENT

     90  

Representations, Warranties and Covenants in the Merger Agreement Are Not Intended to Function or Be Relied on as Public Disclosures

     90  

Structure of the Merger

     90  

Effective Time; Closing

     90  

Equity Consideration

     91  

Fractional Shares

     91  

Treatment of Equity Awards

     91  

Exchange of Shares; Stock Transfer Books

     92  

Lost, Stolen or Destroyed Certificates

     93  

Appraisal Rights

     93  

Withholding Taxes

     93  

Representations and Warranties

     93  

Conduct of Business Pending the Effective Time

     96  

 

ii


Table of Contents
     Page  

Certain Additional Agreements

     100  

Conditions to the Merger

     108  

Termination; Amendment and Waiver

     109  

Miscellaneous

     110  

COMPARISON OF STOCKHOLDER RIGHTS

     112  

APPRAISAL RIGHTS OF CHAMPIONX STOCKHOLDERS

     123  

DESCRIPTION OF SLB CAPITAL STOCK

     124  

Available, Issued and Treasury Shares

     124  

Dividend Rights

     124  

Voting Rights

     124  

Preemptive and Other Rights

     125  

Rights upon Liquidation

     125  

Repurchases of SLB Common Stock

     125  

Governance Provisions and Anti-Takeover Effects

     125  

Election and Removal of Directors

     125  

Stockholder Meetings

     126  

Stockholder Action by Written Consent

     126  

Buy-Out

     126  

Listing, Transfer Agent and Registrar

     127  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     128  

STOCKHOLDER PROPOSALS

     130  

EXPERTS

     131  

HOUSEHOLDING

     131  

LEGAL MATTERS

     131  

OTHER MATTERS

     132  

WHERE YOU CAN FIND MORE INFORMATION

     133  

SLB (File No. 001-04601)

     133  

ChampionX (File No. 001-38441)

     133  

ANNEX A

     A-1  

ANNEX B

     B-1  

 

iii


Table of Contents

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE CHAMPIONX SPECIAL MEETING

The following are some questions that you, as a stockholder of ChampionX, may have regarding the Merger, the Merger Agreement and the ChampionX Special Meeting, and brief answers to those questions. You are urged to read carefully this proxy statement/prospectus and the other documents referred to in this proxy statement/prospectus in their entirety because this section may not provide all of the information that is important to you with respect to the Merger, the Merger Agreement and the ChampionX Special Meeting. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this proxy statement/prospectus. You may obtain the information incorporated by reference into this proxy statement/prospectus without charge by following the instructions under the section entitled “Where You Can Find More Information” of this proxy statement/prospectus.

 

Q:

Why am I receiving this document?

 

A:

You are receiving this document because you were a stockholder of record of ChampionX on the record date for the ChampionX Special Meeting. ChampionX and SLB have agreed to combine under the terms of the Merger Agreement that is described in this proxy statement/prospectus. A copy of the Merger Agreement is attached as Annex A.

In order to complete the Merger, among other things, ChampionX stockholders must vote to adopt the Merger Agreement. This proxy statement/prospectus serves as the proxy statement through which ChampionX will solicit proxies to obtain the adoption of the Merger Agreement by holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting (“ChampionX Stockholder Approval”). It also serves as the prospectus for the delivery of SLB common stock as Equity Consideration.

ChampionX is holding the ChampionX Special Meeting to ask its stockholders to vote on the Merger Proposal. At the ChampionX Special Meeting, ChampionX stockholders will also be asked to vote on a proposal, by non-binding, advisory vote, concerning compensation that may become payable to ChampionX’s named executive officers in connection with the Merger and a proposal to adjourn the ChampionX Special Meeting, if necessary, under certain circumstances.

This document contains important information about the Merger, the Merger Agreement and the ChampionX Special Meeting, and you should read it carefully. The enclosed voting materials allow you to vote your shares without attending the ChampionX Special Meeting.

 

Q:

Does my vote matter?

 

A:

Yes, your vote is important. We encourage you to vote as soon as possible.

The Merger cannot be completed unless the holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting vote to approve the Merger Proposal. If you fail to submit a proxy or vote in person at the ChampionX Special Meeting, or vote to abstain, or you do not provide your bank, broker, trust company or other nominee with instructions, as applicable, this will have the same effect as a vote “AGAINST” the Merger Proposal.

 

Q:

What am I being asked to consider and vote on?

 

A:

At the ChampionX Special Meeting, ChampionX stockholders will be asked to consider and vote on:

 

   

Proposal 1: The Merger Proposal: To adopt the Merger Agreement, pursuant to which (i) Merger Sub will merge with and into ChampionX in the Merger, with ChampionX surviving the Merger as an indirect wholly owned subsidiary of SLB and (ii) at the Effective Time, ChampionX’s certificate of incorporation will be amended and restated in its entirety in the form set forth on Exhibit A to the Merger Agreement, which will be the certificate of incorporation of ChampionX until thereafter amended in accordance with its terms and applicable law;

 

1


Table of Contents
   

Proposal 2: The Compensation Proposal: To approve, by a non-binding, advisory vote, the compensation that may become payable to ChampionX’s named executive officers in connection with the Merger; and

 

   

Proposal 3: The Adjournment Proposal: To approve the adjournment of the ChampionX Special Meeting, if necessary, (1) to solicit additional proxies in favor of the Merger Proposal if (a) there are holders of an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum at such meeting or (b) there are insufficient votes at the time of such adjournment to approve the Merger Proposal or (2) to allow reasonable additional time for the filing and mailing of any required supplement or amendment to this proxy statement/prospectus, and the review of such materials by ChampionX stockholders.

 

Q:

How many votes are required to approve each proposal?

 

A:

The following votes are required to approve each proposal:

 

   

The approval of the Merger Proposal requires, assuming a quorum is present, the affirmative vote of the holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting.

 

   

The approval of the Compensation Proposal requires, assuming a quorum is present, the affirmative vote of the holders of a majority of the voting power of ChampionX common stock present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting. Although the ChampionX Board intends to consider the vote resulting from this proposal, the vote is advisory only and, therefore, is not binding on ChampionX or any of its subsidiaries, and, if the Merger Agreement is approved by ChampionX stockholders and the Merger is consummated, the compensation that is based on or otherwise relates to the Merger will be payable to ChampionX’s named executive officers (to the extent that ChampionX is contractually obligated to pay the compensation) even if the Compensation Proposal is not approved.

 

   

The approval of the Adjournment Proposal requires, whether or not a quorum is present, the affirmative vote of the holders of a majority of the voting power of ChampionX common stock present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting.

 

Q:

How many votes do I have for the ChampionX Special Meeting?

 

A:

Each ChampionX stockholder is entitled to one vote for each share of ChampionX common stock held of record as of the close of business on the record date for each proposal.

 

Q:

How does the ChampionX Board recommend that I vote at the ChampionX Special Meeting?

 

A:

The ChampionX Board unanimously recommends a vote “FOR” the Merger Proposal, a vote “FOR” the Compensation Proposal and a vote “FOR” the Adjournment Proposal.

 

Q:

What will happen in the Merger?

 

A:

SLB, Holdco, Merger Sub and ChampionX have agreed to a Merger pursuant to which Merger Sub, a wholly owned subsidiary of Holdco that was formed for the purpose of the Merger, will be merged with and into ChampionX, with ChampionX surviving the Merger as the Surviving Corporation and an indirect wholly owned subsidiary of SLB. Following the Merger, ChampionX will cease to be a publicly held corporation.

In connection with the Merger, each share of ChampionX common stock issued and outstanding immediately prior to the Effective Time (other than ChampionX Excluded Stock) will be converted, without any action on the part of the holder thereof, into the right to receive 0.735 shares of SLB common stock, and, if applicable, cash in lieu of fractional shares.

 

2


Table of Contents

Prior to the Effective Time, SLB will issue shares of SLB common stock to Holdco, which will deliver those shares as the Equity Consideration to be paid to the ChampionX stockholders.

 

Q:

What will happen to ChampionX Equity Awards in the Merger?

 

A:

At the Effective Time, each ChampionX SAR (whether vested or unvested) that is outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive, within 10 business days following the closing, an amount in cash equal to the product of (1) the number of shares of ChampionX common stock underlying such ChampionX SAR multiplied by (2) the excess, if any, of the ChampionX Closing Price over the exercise or reference price of such ChampionX SAR. If the product of clauses (1) and (2) in the foregoing sentence is not greater than zero, at the Effective Time such ChampionX SAR will automatically be cancelled for no consideration.

At the Effective Time, each ChampionX Option that is outstanding immediately prior to the Effective Time will automatically be converted into an option to acquire shares of SLB common stock with respect to that number of shares of SLB common stock that is equal to (i) the product of (A) the number of shares of ChampionX common stock underlying such ChampionX Option as of immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole number (after such conversion, an “SLB Option”), at an exercise price per share equal to the quotient obtained by (x) dividing (i) the per share exercise price of the ChampionX Option by (ii) the Exchange Ratio, (y) rounded up to the nearest whole cent, provided, however, that the exercise price and the number of shares of SLB common stock covered by such SLB Option will be determined in a manner that is intended to be consistent with the requirements of Section 409A of the Code. Each SLB Option will otherwise continue to have, and will be subject to, the same terms and conditions as applied to the ChampionX Option immediately prior to the Effective Time.

At the Effective Time, each ChampionX RSU Award that is outstanding immediately prior to the Effective Time will be assumed and converted into a restricted stock unit award to acquire shares of SLB common stock (each, an “SLB RSU Award”), which will have, and be subject to, the same terms and conditions as applied to the ChampionX RSU Award immediately prior to the Effective Time, except that, (x) the number of shares of SLB common stock subject to the SLB RSU Award will equal (i) the product of (A) the number of shares of ChampionX common stock underlying such ChampionX RSU Award multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share, (y) each SLB RSU Award will vest in full if, following the Effective Time, the holder thereof incurs a qualifying termination of employment by SLB or its subsidiaries at any time that such SLB RSU Award remains outstanding (and, solely in the case of a qualifying termination that occurs more than 18 months following the closing date, subject to the holder timely executing (and not revoking) a general release of claims in a form provided by SLB or one of its subsidiaries), and (z) SLB RSU Awards will not be entitled to receive any dividend equivalent rights with respect to any dividends declared or accrued following the Effective Time. At the Effective Time, each ChampionX DER (whether vested or unvested) will be cancelled and converted into the right to receive within 10 business days following the closing date, an amount in cash equal to the ChampionX Pre-Closing Dividend Amount.

At the Effective Time, each ChampionX Performance Share Award that is outstanding immediately prior to the Effective Time will be assumed and converted into an SLB RSU Award, which will have, and be subject to, the same terms and conditions as applied to the ChampionX Performance Share Award immediately prior to the Effective Time, except that, (x) the number of shares of SLB common stock subject to the SLB RSU Award will equal (i) the product of (A) a number of shares of ChampionX common stock underlying such ChampionX Performance Share Award determined based on such award’s Applicable Performance Level by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share, (y) each such SLB RSU Award will vest in full if, following the Effective Time, the holder thereof incurs a qualifying termination (and, solely in the case of a qualifying termination that occurs more than 18 months following the closing

 

3


Table of Contents

date, subject to the holder timely executing (and not revoking) a general release of claims in a form provided by SLB or one of its subsidiaries), and (z) SLB RSU Awards will not be subject to any performance-based vesting conditions, which will be deemed achieved at the Applicable Performance Level.

At the Effective Time, each ChampionX DSU Award (whether vested or unvested) that is outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive, within 10 business days following the closing date, a number of shares of SLB common stock equal to (i) the product of (A) the number of shares of ChampionX common stock underlying the ChampionX DSU Award multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share.

At the Effective Time, SLB will assume all of ChampionX’s obligations under the ChampionX

Amended and Restated 2018 Equity and Cash Incentive Plan (the “ChampionX Equity Plan”), each outstanding ChampionX Equity Award and the agreements evidencing the grants thereof, and the number and kind of shares available for issuance under the ChampionX Equity Plan will be adjusted to reflect shares of SLB common stock in accordance with the provisions of the ChampionX Equity Plan.

For additional information regarding the treatment of ChampionX’s equity awards, please see the section of this proxy statement/prospectus entitled “The Merger Agreement—Treatment of Equity Awards.”

 

Q:

How do I calculate the value of the Equity Consideration?

 

A:

Because SLB will issue a fixed number of shares of SLB common stock as the Equity Consideration, the value of the Equity Consideration will depend on the price per share of SLB common stock at the time the Merger is completed. That price will not be known at the time of the ChampionX Special Meeting and may be greater or less than the current price of SLB common stock or the price of SLB common stock at the time of the ChampionX Special Meeting. The market price of SLB common stock will fluctuate prior to the Merger, and the market price of SLB common stock when received by ChampionX stockholders after the Merger is completed could be greater or less than the current market price of SLB common stock. See the section entitled “Risk Factors” of this proxy statement/prospectus.

Based on the closing price of SLB common stock on the NYSE on April 1, 2024, the last trading day before the public announcement of the Merger Agreement, the Equity Consideration represented approximately $40.59 per share of ChampionX common stock. Based on the closing price of SLB common stock on the NYSE on May 14, 2024, the most recent practicable trading day prior to the date of this proxy statement/prospectus, the Equity Consideration represented approximately $35.74 in value per share of ChampionX common stock. You should obtain current market quotations of ChampionX common stock and SLB common stock.

 

Q:

What are the material U.S. federal income tax consequences of the Merger?

 

A:

The exchange of ChampionX common stock for SLB common stock in the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, subject to the discussion below relating to the potential application of Section 304 of the Internal Revenue Code of 1986, as amended (the “Code”), under the section titled “The Merger—Material U.S. Federal Income Tax Consequences,” a U.S. Holder (as defined in the section titled “The Merger—Material U.S. Federal Income Tax Consequences”) will recognize capital gain or loss equal to the difference, if any, between (1) the sum of the fair market value of SLB common stock received by such U.S. Holder in the Merger and any cash received in lieu of fractional shares of ChampionX common stock, and (2) the U.S. Holder’s adjusted tax basis in its ChampionX common stock.

Except in certain specific circumstances (including as a result of the potential application of Section 304 of the Code) described in the section entitled “The Merger—Material U.S. Federal Income Tax Consequences,” a Non-U.S. Holder (as defined in the section entitled “The Merger—Material U.S. Federal

 

4


Table of Contents

Income Tax Consequences”) generally will not be subject to U.S. federal income tax on any gain recognized on the exchange of ChampionX common stock for SLB common stock in the Merger.

Please refer to the section entitled “The Merger—Material U.S. Federal Income Tax Consequences” of this proxy statement/prospectus for a description of the material U.S. federal income tax consequences of the Merger. Determining the actual tax consequences of the Merger to you may be complex and will depend on your specific situation. You should consult your tax advisor for a full understanding of the tax consequences of the Merger to you.

 

Q:

What happens if the Merger is not completed?

 

A:

If the Merger Proposal is not approved by ChampionX stockholders or if the Merger is not completed for any other reason, you will not receive any payment for your shares of ChampionX common stock in connection with the Merger. Instead, ChampionX will remain as a public company and ChampionX common stock will continue to be registered under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, and listed and traded on the Nasdaq. If the Merger Agreement is terminated under specified circumstances, SLB may be required to pay ChampionX a termination fee of $326.6 million, and ChampionX may be required to pay SLB a termination fee of $265.4 million, as described under the section entitled “The Merger Agreement—Termination, Amendment and Waiver.”

 

Q:

Will I receive future dividends?

 

A:

Pursuant to the terms of the Merger Agreement, between the signing of the Merger Agreement and the closing date, ChampionX may continue to pay its regular quarterly cash dividends with customary record and payment dates, subject to certain limitations.

 

Q:

What happens if I sell my shares after the record date but before the ChampionX Special Meeting?

 

A:

The record date for the ChampionX Special Meeting is earlier than the date of the ChampionX Special Meeting and the date that the Transactions are expected to be completed. If you sell or otherwise transfer your shares of ChampionX common stock after the record date but before the date of the ChampionX Special Meeting, you will retain your right to vote at the ChampionX Special Meeting. However, you will not have the right to receive the Equity Consideration to be received by ChampionX stockholders in the Merger. In order to receive the Equity Consideration, you must hold your shares through completion of the Merger.

 

Q:

Am I entitled to appraisal rights if I vote against the adoption of the Merger Agreement?

 

A:

Holders of SLB common stock and ChampionX common stock will not have appraisal rights in connection with the Merger, as more fully described in “The Merger—Appraisal Rights.”

 

Q:

Is the consummation of the Merger subject to any conditions?

 

A:

Yes. In addition to the approval of the Merger Proposal, completion of the Merger requires the receipt of the necessary governmental and regulatory consents and approvals and the satisfaction or, to the extent permitted by applicable law, waiver of the other conditions specified in the Merger Agreement.

 

Q:

Is the consummation of the Merger contingent upon approval of the holders of SLB common stock?

 

A:

No, a vote of holders of SLB common stock is not required to consummate the Merger.

 

5


Table of Contents
Q:

When do you expect to complete the Transactions?

 

A:

ChampionX and SLB are working to complete the Transactions as promptly as practicable. ChampionX and SLB currently expect to complete the Transactions before the end of 2024, subject to receipt of the ChampionX Stockholder Approval, regulatory approvals and other usual and customary closing conditions. However, no assurance can be given as to when, or if, the Transactions will occur.

 

Q:

Why am I being asked to consider and vote on the Compensation Proposal?

 

A:

Under SEC rules, ChampionX is required to seek a non-binding, advisory vote with respect to certain compensation that may become payable to ChampionX’s named executive officers in connection with the Merger.

 

Q:

What will happen if the ChampionX stockholders do not approve the Compensation Proposal?

 

A:

The Compensation Proposal is a vote separate and apart from the vote to adopt the Merger Agreement, and approval of the Compensation Proposal is not a condition to the completion of the Merger. Accordingly, you may vote to approve the Compensation Proposal and vote not to adopt the Merger Agreement and vice versa. Because the vote is advisory in nature only, it will not be binding on ChampionX or the Surviving Corporation. Accordingly, to the extent that ChampionX is contractually obligated to pay the compensation, the compensation will be payable to the named executive officers, subject only to the conditions applicable thereto, if the Merger Agreement is adopted and the Merger consummated, regardless of the outcome of the Compensation Proposal.

 

Q:

Should I send in my stock certificates now?

 

A:

No, please do not submit your ChampionX stock certificates or other evidence of ownership at this time. At the Effective Time, your shares of ChampionX common stock will be converted automatically into the right to receive the Equity Consideration. After completion of the Merger, you will receive instructions for surrendering your ChampionX stock certificates in exchange for shares of SLB common stock from the exchange agent.

 

Q:

When and where will the ChampionX Special Meeting be held?

 

A:

The ChampionX Special Meeting will be held via a live webcast at, on June 18, 2024 at 9:00 a.m. Central Time (unless it is adjourned or postponed to a later date).

The ChampionX Special Meeting can be accessed by visiting https://meetnow.global/M6YL2F7, where ChampionX stockholders will be able to participate and vote online during the ChampionX Special Meeting. ChampionX encourages its stockholders to access the meeting early—approximately 15 minutes before the start of the meeting. Please follow the instructions as outlined in this proxy statement/prospectus.

 

Q:

Who may vote at the ChampionX Special Meeting?

 

A:

You are entitled to vote your shares of ChampionX common stock if you are a stockholder of record on the close of business on May 14, 2024, the record date for the ChampionX Special Meeting.

 

Q:

How do I vote?

 

A:

ChampionX stockholders of record may submit their proxies:

 

   

by telephone (within the United States, U.S. territories and Canada) using the toll-free telephone number listed on the enclosed proxy card;

 

6


Table of Contents
   

through the Internet by logging onto the website indicated on the enclosed proxy card and following the prompts using the Control Number located on the proxy card; or

 

   

by mail, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

ChampionX stockholders whose shares are held in “street name” must provide their broker, nominee, fiduciary or other custodian with instructions on how to vote their shares; otherwise, their broker, nominee, fiduciary or other custodian will not vote their shares on any of the proposals before the ChampionX Special Meeting. ChampionX stockholders should check the voting form provided by their broker, nominee, fiduciary or other custodian for instructions on how to vote their shares.

 

Q:

How will my shares be voted?

 

A:

If you vote by proxy, the individuals named on the proxy card (your proxies) will vote your shares in the manner you indicate. You may also specify whether you approve, disapprove or abstain from the other proposals. If you sign and return your proxy card without indicating your voting instructions, your shares will be voted “FOR” each of the Merger Proposal, the Compensation Proposal and the Adjournment Proposal.

 

Q:

What if my shares are held by a broker?

 

A:

ChampionX stockholders whose shares are held in “street name” must provide their broker, nominee, fiduciary or other custodian with instructions on how to vote their shares; otherwise, their broker, nominee, fiduciary or other custodian will not vote their shares on any of the proposals before the ChampionX Special Meeting. ChampionX stockholders should check the voting form provided by their broker, nominee, fiduciary or other custodian for instructions on how to vote their shares.

If you fail to vote, fail to instruct your bank, broker, trust company or other nominee to vote, or vote to abstain, it will have the same effect as a vote cast “AGAINST” the Merger Proposal.

If you fail to vote, or fail to instruct your bank, broker, trust company or other nominee to vote, it will have no effect on the Compensation Proposal or Adjournment Proposal. A vote to abstain will have the same effect as a vote cast “AGAINST” the Compensation Proposal or Adjournment Proposal.

 

Q:

May I revoke or change my vote?

 

A:

You may revoke your proxy at any time prior to a vote at the ChampionX Special Meeting by:

 

   

notifying ChampionX’s Corporate Secretary in writing at the address indicated on the cover page of this proxy statement/prospectus prior to the ChampionX Special Meeting that you have revoked your proxy;

 

   

signing and returning a new, valid proxy card with a later date (by mail, telephone or Internet); or

 

   

attending the virtual ChampionX Special Meeting and voting electronically, which will revoke any proxy previously given. Your attendance at the ChampionX Special Meeting will not by itself revoke your proxy.

 

Q:

What constitutes a quorum?

 

A:

A majority of the issued and outstanding ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting, will constitute a quorum for the ChampionX Special Meeting. There must be a quorum for the ChampionX Special Meeting to be held. If you submit a timely, properly executed proxy or voting instruction form, then you will be considered part of the quorum so long

 

7


Table of Contents
  as your shares are voted on at least one item of business, other than a procedural motion. Abstentions will be counted for purposes of determining whether there is a quorum at the ChampionX Special Meeting. A broker non-vote occurs when a beneficial owner does not provide voting instruction to their broker or custodian with respect to a proposal on which such broker or custodian does not have discretionary authority to vote. If you are a “street name” holder of shares of ChampionX common stock and you do not provide your bank, broker, trust or other nominee with voting instructions, then your shares will not be counted in determining the presence of a quorum.

 

Q:

What will happen if I return my proxy card without indicating how to vote?

 

A:

If you sign, date and return your proxy card and do not indicate how you want your shares of ChampionX common stock to be voted, then your shares of ChampionX common stock will be voted “FOR” the Merger Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.

 

Q:

What will happen if I fail to vote or I abstain from voting?

 

A:

If you fail to vote, fail to instruct your bank, broker, trust company or other nominee to vote, or vote to abstain, it will have the same effect as a vote cast “AGAINST” the Merger Proposal.

If you fail to vote, or fail to instruct your bank, broker, trust company or other nominee to vote, it will have no effect on the Compensation Proposal or Adjournment Proposal. A vote to abstain will have the same effect as a vote cast “AGAINST” the Compensation Proposal or Adjournment Proposal.

 

Q:

What other matters will be acted upon at the ChampionX Special Meeting?

 

A:

No other matters will be presented at the ChampionX Special Meeting, other than those mentioned in this proxy statement/prospectus.

 

Q:

Who pays the cost of this proxy solicitation?

 

A:

ChampionX will pay the cost of solicitation of proxies, including preparing, printing and mailing this proxy statement/prospectus. ChampionX has retained D.F. King to assist in the solicitation process. ChampionX will pay D.F. King a fee of approximately $15,000, plus an additional fixed fee for each ChampionX stockholder contacted, and will reimburse D.F. King for reasonable out-of-pocket expenses.

 

Q:

What do I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials for the ChampionX Special Meeting, including multiple copies of this proxy statement/prospectus, proxy cards and/or voting instruction forms. This can occur if you hold your shares in more than one brokerage account, if you hold shares directly as a record holder and also in “street name,” or otherwise through a nominee, and in certain other circumstances. If you receive more than one set of voting materials, each should be voted and/or returned separately in order to ensure that all of your shares are voted.

 

Q:

Where can I find the voting results of the ChampionX Special Meeting?

 

A:

The preliminary voting results will be announced at the ChampionX Special Meeting. In addition, within four business days following certification of the final voting results, ChampionX intends to file the final voting results with the SEC on Form 8-K.

 

Q:

Are there any risks in the Merger that I should consider?

 

A:

Yes. There are risks associated with all business combinations, including the Merger. These risks are discussed in more detail in the section entitled “Risk Factors.”

 

8


Table of Contents
Q:

What do I need to do now?

 

A:

Carefully read and consider the information contained in and incorporated by reference into this proxy statement/prospectus, including its annexes. Then, please vote your shares of ChampionX common stock, which you may do:

 

   

by telephone (within the United States, U.S. territories and Canada) using the toll-free telephone number listed on the enclosed proxy card;

 

   

through the Internet by logging onto the website indicated on the enclosed proxy card and following the prompts using the Control Number located on the proxy card; or

 

   

by mail, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

ChampionX stockholders whose shares are held in “street name” must provide their broker, nominee, fiduciary or other custodian with instructions on how to vote their shares; otherwise, their broker, nominee, fiduciary or other custodian will not vote their shares on any of the proposals before the ChampionX Special Meeting. ChampionX stockholders should check the voting form provided by their broker, nominee, fiduciary or other custodian for instructions on how to vote their shares.

 

Q:

Where can I find more information about the parties to the Merger?

 

A:

You can find more information about ChampionX and SLB from the various sources described in the sections entitled “The Companies” and “Where You Can Find More Information.”

 

Q:

Whom should I call with questions?

 

A:

ChampionX stockholders who have questions about the Merger or the other matters to be voted on at the ChampionX Special Meeting or desire additional copies of this document or additional proxy cards should contact:

D.F. KING & CO., INC.

48 Wall Street – 22nd Floor

New York, NY 10005

Banks and Brokers Call Collect: (212) 269-5550

All Others Please Call Toll-Free: (866) 416-0577

By email: championx@dfking.com

 

9


Table of Contents

SUMMARY

This summary highlights selected information contained in this proxy statement/prospectus with respect to the Merger and the Merger Agreement and may not contain all of the information that is important to you. To understand the Merger and the Merger Agreement fully and for a more complete description of the legal terms of the Merger Agreement, you should carefully read this entire proxy statement/prospectus and the documents to which SLB and ChampionX refer you. A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus and is incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” of this proxy statement/prospectus. SLB and ChampionX have included in this summary references to other portions of this proxy statement/prospectus to direct you to a more complete description of the topics presented, which you should review carefully in their entirety.

The Companies

ChampionX Corporation

ChampionX is a global leader in chemistry solutions, artificial lift systems and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently and sustainably around the world. ChampionX’s expertise, innovative products, and digital technologies products provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. ChampionX has a presence in more than 60 countries with more than 7,300 employees.

The principal U.S. market for ChampionX common stock is the Nasdaq, where it is traded under the symbol “CHX.”

ChampionX’s rich history is built on over a century of experience, dating back to the 1800s and the petroleum industry’s infancy. ChampionX is incorporated under the laws of Delaware, with its corporate headquarters located at 2445 Technology Forest Blvd., Building 4, Suite 1200, The Woodlands, TX 77381, and its phone number is (281) 403-5772.

Schlumberger Limited

SLB is a global technology company focused on driving energy innovation for a balanced planet. With a global presence in more than 100 countries and employees representing almost twice as many nationalities, SLB works each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition.

The principal U.S. market for SLB common stock is the NYSE, where it is traded under the symbol “SLB.” SLB common stock is also listed for trading on the Euronext Paris.

SLB was founded in 1926 and is incorporated under the laws of Curaçao, with executive offices in Paris, Houston, London and The Hague. SLB’s executive offices in the United States are at 5599 San Felipe, Houston, Texas 77056, and its telephone number is (713) 513-2000.

Sodium Holdco, Inc.

Sodium Holdco, Inc., which we refer to as Holdco, is a Delaware corporation and an indirect wholly owned subsidiary of SLB. Holdco has not carried on any activities to date, other than activities incidental to its formation or undertaken in connection with the Transactions.

 

10


Table of Contents

Sodium Merger Sub, Inc.

Sodium Merger Sub, Inc., which we refer to as Merger Sub, is a Delaware corporation and a direct wholly owned subsidiary of Sodium Holdco, Inc. Merger Sub has not carried on any activities to date, other than activities incidental to its formation or undertaken in connection with the Transactions.

The Merger

The Merger Agreement

SLB, Holdco, Merger Sub and ChampionX have entered into an Agreement and Plan of Merger, dated as of April 2, 2024. Pursuant to the Merger Agreement, at the Effective Time, Merger Sub will merge with and into ChampionX in accordance with the requirements of Delaware law, whereupon the separate existence of Merger Sub will cease and ChampionX will continue as the Surviving Corporation in the Merger as an indirect wholly owned subsidiary of SLB. Following the Merger, ChampionX common stock will be delisted from Nasdaq, will be deregistered under the Exchange Act and will cease to be publicly traded. A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus. You should read the entire Merger Agreement carefully before making any decisions regarding the Merger, including approval of the proposal to adopt the Merger Agreement, because it is the legal document that governs the Merger.

The Equity Consideration

If the Merger is completed, at the Effective Time, each share of ChampionX common stock issued and outstanding immediately prior to the Effective Time (other than ChampionX Excluded Stock) will be converted, without any action on the part of the holder thereof, into the right to receive 0.735 shares of SLB common stock. No fractional shares of SLB common stock will be delivered to any holder of ChampionX common stock upon completion of the Merger. For each fractional share that would otherwise be delivered, SLB will pay cash (without interest and rounded up to the nearest whole cent) in an amount equal to the product of (i) the volume-weighted average closing sale price of a share of SLB common stock as reported on the NYSE for the 15 consecutive full trading days (in which shares of SLB common stock are traded on the NYSE) ending at the close of trading on the full trading day immediately preceding the closing date and (ii) the fraction of share SLB common stock that such holder would otherwise be entitled to receive pursuant to the Merger Agreement.

The Exchange Ratio is fixed and will not be adjusted for changes in the market price of either ChampionX common stock or SLB common stock, which means that the value of the Equity Consideration will depend on the price per share of SLB common stock at the time the Merger is completed. That price will not be known at the time of the ChampionX Special Meeting and may be greater or less than the current price of SLB common stock or the price of SLB common stock at the time of the ChampionX Special Meeting. The market price of SLB common stock will fluctuate prior to the Merger, and the market price of SLB common stock when received by ChampionX stockholders in connection with the Merger could be greater or less than the current market price of SLB common stock.

Risk Factors

The Transactions, including the Merger, involve risks. In considering the Merger, including whether to vote for the Merger Proposal, the Compensation Proposal and the Adjournment Proposal, you should carefully consider the information about these risks set forth under the section entitled “Risk Factors,” a summary of which is set forth below, together with the other information included or incorporated by reference in this proxy statement/prospectus.

 

   

The Exchange Ratio is fixed and will not be adjusted in the event of any change in either ChampionX’s or SLB’s stock price. In addition, because the date that the Merger is completed will be later than the date of the ChampionX Special Meeting, at the time of the ChampionX Special Meeting, ChampionX stockholders will not know the exact market value of the SLB common stock that they will receive upon completion of the Merger.

 

11


Table of Contents
   

The market price for SLB common stock may be affected by factors different from those that historically have affected the market price of ChampionX common stock.

 

   

ChampionX stockholders will have a significantly reduced ownership and voting interest in the Combined Company after the Merger and will exercise less influence over the Combined Company’s management.

 

   

ChampionX’s directors and executive officers have interests in the Merger that may be different from, and in addition to, the interests of other ChampionX stockholders.

 

   

SLB and ChampionX will be subject to business uncertainties and certain operating restrictions until the completion of the Merger.

 

   

ChampionX may be unable to attract and retain key employees during the pendency of the Merger.

 

   

The ability of ChampionX and SLB to complete the Merger is subject to the approval of ChampionX stockholders, certain closing conditions and the receipt of certain regulatory approvals and clearances that may impose conditions that could adversely affect ChampionX or SLB or cause the Merger to be abandoned.

 

   

SLB or ChampionX may waive one or more of the closing conditions without ChampionX re-soliciting stockholder approval.

 

   

Litigation relating to the Merger could result in an injunction preventing completion of the Merger and substantial costs to SLB and ChampionX, and/or may adversely affect the Combined Company’s business, financial condition or results of operations following the Merger.

 

   

SLB shareholders and ChampionX stockholders will not be entitled to appraisal rights in the Merger.

 

   

The opinion of ChampionX’s financial advisor does not and will not reflect changes in circumstances between the signing of the Merger Agreement and the completion of the Merger.

 

   

The financial projections prepared by ChampionX management are based on various assumptions that may not be realized.

 

   

The Merger Agreement contains restrictions on the ability of ChampionX to pursue other alternatives to the Merger.

 

   

Completion of the Merger may trigger change in control or other provisions in certain agreements to which ChampionX or any of its respective subsidiaries or joint ventures is a party.

 

   

SLB and ChampionX may be unable to complete the Merger.

 

   

The Combined Company could incur substantial expenses related to the Merger and the integration of ChampionX and SLB.

 

   

Following the Merger, the Combined Company may be unable to successfully integrate ChampionX’s and SLB’s businesses and realize the anticipated benefits or synergies of the Merger.

 

   

Business issues currently faced by one company may be imputed to the operations of the other company.

 

   

Each of ChampionX and SLB may have liabilities that are not known to the other party.

 

   

The Combined Company may not be able to retain customers or suppliers, and customers or suppliers may seek to modify contractual obligations with the Combined Company.

 

   

Failure to retain key employees and skilled workers could adversely affect the Combined Company following the Merger.

 

12


Table of Contents
   

SLB and ChampionX must obtain certain regulatory approvals and clearances to consummate the Merger, which, if delayed, not granted or granted with unacceptable conditions, could prevent, substantially delay or impair consummation of the Merger, result in additional expenditures of money and resources or reduce the anticipated benefits of the Merger.

 

   

The trading price and volume of SLB common stock may be volatile following the completion of the Merger.

 

   

The market value of SLB common stock could decline if large amounts of SLB common stock are sold following the Merger.

 

   

The Merger may not be accretive, and may be dilutive, to SLB’s earnings per share in the near term, which may negatively affect the market price of SLB common stock.

 

   

The shares of SLB common stock to be received by ChampionX stockholders upon the completion of the Merger will have different rights from shares of ChampionX common stock.

 

   

ChampionX stockholders will receive no cash consideration, other than cash in lieu of fractional shares of SLB common stock, with which to pay any potential tax liability resulting from the Merger.

The ChampionX Special Meeting

Meeting

The ChampionX Special Meeting will be held via a live webcast at https://meetnow.global/M6YL2F7, on June 18, 2024 at 9:00 a.m. Central Time (unless it is adjourned or postponed to a later date).

The ChampionX Special Meeting can be accessed by visiting https://meetnow.global/M6YL2F7, where ChampionX stockholders will be able to participate and vote online during the ChampionX Special Meeting. ChampionX encourages its stockholders to access the meeting approximately 15 minutes before the start of the meeting. Please follow the instructions as outlined in this proxy statement/prospectus.

Record Date

The record date for determining ChampionX stockholders entitled to receive notice of, and to vote at, the ChampionX Special Meeting or at any adjournment or postponement thereof, is the close of business on May 14, 2024. As of the record date, there were 190,579,933 shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting. Each such holder will be entitled to one vote for each share of ChampionX common stock that it owned on the record date.

Required Vote

The vote required for each proposal are as follows:

 

   

Merger Proposal. The approval of the Merger Proposal requires, assuming a quorum is present, the affirmative vote of the holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting. Abstentions, a broker non-vote or a failure to vote will have the same effect as a vote “AGAINST” the Merger Proposal.

 

   

Compensation Proposal. The approval of the Compensation Proposal requires, assuming a quorum is present, the affirmative vote of the holders of a majority of the voting power of ChampionX present or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting. Although the ChampionX Board intends to consider the vote resulting from this proposal, the vote is advisory only and, therefore, is not binding on ChampionX or any of its subsidiaries, and, if the Merger Agreement is approved by ChampionX stockholders and the Merger is consummated, the compensation that is based on or otherwise relates to the Merger will be payable to ChampionX’s

 

13


Table of Contents
 

named executive officers (to the extent that ChampionX is contractually obligated to pay the compensation) even if the Compensation Proposal is not approved. Abstentions will have the same effect as a vote “AGAINST” the Compensation Proposal. Broker non-votes and failure of any ChampionX stockholder to submit a vote (e.g., by not submitting a proxy or not voting online) will have no effect on approval of the Compensation Proposal.

 

   

Adjournment Proposal. Approval of the Adjournment Proposal requires, whether or not a quorum is present, the affirmative vote of the holders of a majority of the voting power of ChampionX common stock present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal. Broker non-votes and failure of any ChampionX stockholders to submit a vote (e.g., by not submitting a proxy or not voting online) will have no effect on approval of the Adjournment Proposal.

Recommendation of the ChampionX Board of Directors

The ChampionX Board unanimously (i) determined the Merger Agreement and the consummation of the Merger and the Transactions to be fair to and in the best interests of ChampionX and its stockholders, (ii) declared the Merger Agreement and the consummation of the Transactions, including the Merger, to be advisable, (iii) authorized and approved the Merger Agreement, including the execution, delivery and performance thereof, (iv) directed that the Merger Agreement be submitted to the ChampionX stockholders for their consideration and adoption and (v) recommended the ChampionX stockholders adopt the Merger Agreement.

Accordingly, the ChampionX Board unanimously recommends that ChampionX stockholders vote “FOR” the Merger Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.

In the course of reaching its determinations and recommendations, the ChampionX Board reviewed and discussed a significant amount of information and consulted with members of ChampionX’s management and outside legal and financial advisors and considered the factors described in the section entitled “The Merger—ChampionX’s Reasons for the Merger; Recommendation of the ChampionX Board of Directors.”

SLB Shareholder Approval Is Not Required

SLB shareholders are not required to adopt the Merger Agreement or approve the Merger or the issuance of shares of SLB common stock in connection with the Merger.

Treatment of Equity Awards

At the Effective Time, each ChampionX SAR (whether vested or unvested) that is outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive, within 10 business days following the closing, an amount in cash equal to the product of (1) the number of shares of ChampionX common stock underlying such ChampionX SAR multiplied by (2) the excess, if any, of the ChampionX Closing Price over the exercise or reference price of such ChampionX SAR. If the product of clauses (1) and (2) in the foregoing sentence is not greater than zero, at the Effective Time such ChampionX SAR will automatically be cancelled for no consideration.

At the Effective Time, each ChampionX Option that is outstanding immediately prior to the Effective Time will automatically be converted into an SLB Option, at an exercise price per share equal to the quotient obtained by (x) dividing (i) the per share exercise price of the ChampionX Option by (ii) the Exchange Ratio, (y) rounded up to the nearest whole cent, provided, however, that the exercise price and the number of shares of SLB common

 

14


Table of Contents

stock covered by such SLB Option will be determined in a manner that is intended to be consistent with the requirements of Section 409A of the Code. Each SLB Option will otherwise continue to have, and will be subject to, the same terms and conditions as applied to the ChampionX Option immediately prior to the Effective Time.

At the Effective Time, each ChampionX RSU Award that is outstanding immediately prior to the Effective Time will be assumed and converted into an SLB RSU Award, which will have, and be subject to, the same terms and conditions as applied to the ChampionX RSU Award immediately prior to the Effective Time, except that, (x) the number of shares of SLB common stock subject to the SLB RSU Award will equal (i) the product of (A) the number of shares of ChampionX common stock underlying such ChampionX RSU Award multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share, (y) each SLB RSU Award will vest in full if, following the Effective Time, the holder thereof incurs a qualifying termination of employment by SLB or its subsidiaries at any time that such SLB RSU Award remains outstanding (and, solely in the case of a qualifying termination that occurs more than 18 months following the closing date, subject to the holder timely executing (and not revoking) a general release of claims in a form provided by SLB or one of its subsidiaries), and (z) SLB RSU Awards will not be entitled to receive any dividend equivalent rights with respect to any dividends declared or accrued following the Effective Time. At the Effective Time, each ChampionX DER (whether vested or unvested) will be cancelled and converted into the right to receive within 10 business days following the closing date, an amount in cash equal to the ChampionX Pre-Closing Dividend Amount.

At the Effective Time, each ChampionX Performance Share Award that is outstanding immediately prior to the Effective Time will be assumed and converted into an SLB RSU Award, which will have, and be subject to, the same terms and conditions as applied to the ChampionX Performance Share Award immediately prior to the Effective Time, except that, (x) the number of shares of SLB common stock subject to the SLB RSU Award will equal (i) the product of (A) a number of shares of ChampionX common stock underlying such ChampionX Performance Share Award determined based on such award’s Applicable Performance Level by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share, (y) each such SLB RSU Award will vest in full if, following the Effective Time, the holder thereof incurs a qualifying termination (and, solely in the case of a qualifying termination that occurs more than 18 months following the closing date, subject to the holder timely executing (and not revoking) a general release of claims in a form provided by SLB or one of its subsidiaries), and (z) SLB RSU Awards will not be subject to any performance-based vesting conditions, which will be deemed achieved at the Applicable Performance Level.

At the Effective Time, each ChampionX DSU Award (whether vested or unvested) that is outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive, within 10 business days following the closing date, a number of shares of SLB common stock equal to (i) the product of (A) the number of shares of ChampionX common stock underlying the ChampionX DSU Award multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share.

At the Effective Time, SLB will assume all of ChampionX’s obligations under the ChampionX Equity Plan, each outstanding ChampionX Equity Award and the agreements evidencing the grants thereof, and the number and kind of shares available for issuance under the ChampionX Equity Plan will be adjusted to reflect shares of SLB common stock in accordance with the provisions of the ChampionX Equity Plan.

Opinion of ChampionX’s Financial Advisor

ChampionX retained Centerview Partners LLC (“Centerview”) as financial advisor to the ChampionX Board in connection with the Merger and the Transactions. In connection with this engagement, the ChampionX Board requested that Centerview evaluate the fairness, from a financial point of view, to the holders of shares of ChampionX common stock (other than holders of shares of ChampionX Excluded Stock and any shares of ChampionX common stock held by any affiliate of ChampionX or SLB) of the Exchange Ratio provided for

 

15


Table of Contents

pursuant to the Merger Agreement. On April 1, 2024, Centerview rendered to the ChampionX Board its oral opinion, which was subsequently confirmed by delivery of a written opinion dated April 1, 2024, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Exchange Ratio provided for pursuant to the Merger Agreement was fair, from a financial point of view, to holders of ChampionX common stock (other than holders of shares of ChampionX Excluded Stock and any shares of ChampionX common stock held by any affiliate of ChampionX or SLB).

The full text of Centerview’s written opinion, dated April 1, 2024, which describes the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex B to this proxy statement/prospectus and is incorporated by reference into this proxy statement/prospectus. Centerview’s financial advisory services and opinion were provided for the information and assistance of the ChampionX Board (in the directors’ capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Merger and the Transactions and Centerview’s opinion addressed only the fairness, from a financial point of view, as of the date thereof, to the holders of shares of ChampionX common stock (other than holders of shares of ChampionX Excluded Stock and any shares of ChampionX common stock held by any affiliate of ChampionX or SLB) of the Exchange Ratio provided for pursuant to the Merger Agreement. Centerview’s opinion did not address any other term or aspect of the Merger Agreement, the Merger or the Transactions and does not constitute a recommendation to any ChampionX stockholder or any other person as to how such stockholder or other person should vote with respect to the Merger or otherwise act with respect to the Merger and the Transactions or any other matter.

The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.

Interests of ChampionX’s Directors and Executive Officers in the Merger

In considering the recommendation of the ChampionX Board that ChampionX stockholders approve the Merger and vote in favor of the Merger Proposal and the Compensation Proposal, ChampionX stockholders should be aware that the executive officers and directors of ChampionX have certain interests in the Merger that are or may be different from, or in addition to, the interests of ChampionX stockholders generally. The ChampionX Board was aware of these interests and considered them, among other matters, in evaluating and approving the Merger Agreement, and in making its recommendation that ChampionX stockholders adopt the Merger Agreement. For more information, see the section entitled “The Merger—Interests of ChampionX’s Directors and Executive Officers in the Merger.”

Ownership of SLB After the Merger

The actual number of shares of SLB common stock to be issued and reserved for issuance in connection with the Merger will be determined at the completion of the Merger based on the Exchange Ratio. Upon the completion of the Merger, it is expected that ChampionX stockholders, who collectively own 100% of ChampionX, will own approximately 9% of SLB common stock, based on the number of shares of ChampionX common stock and SLB common stock outstanding as of the record date.

Listing of SLB Stock and Delisting and Deregistration of ChampionX Stock

SLB will apply to have the shares of SLB common stock to be issued and delivered in the Merger and such other SLB common stock to be reserved for issuance in connection with the Merger to be approved for listing on the

 

16


Table of Contents

NYSE, where SLB common stock is currently traded. If the Merger is completed, shares of ChampionX common stock will be delisted from Nasdaq, will be deregistered under the Exchange Act and will cease to be publicly traded.

Appraisal Rights

Holders of SLB common stock and ChampionX common stock will not have appraisal rights in connection with the Merger, as more fully described in The Merger—Appraisal Rights.”

Completion of the Merger Is Subject to Certain Conditions

The respective obligations of each party to effect the Merger will be subject to the fulfillment of the following conditions on or prior to the closing date:

 

   

receipt of the ChampionX Stockholder Approval;

 

   

the approval for listing on the NYSE of the SLB common stock to be issued as Equity Consideration pursuant to the Merger;

 

   

the absence of any final and non-appealable law—exclusive of certain specified antitrust regulatory laws—that permanently enjoins, prohibits, prevents, or makes illegal the consummation of the Transactions (“Mutual Legal Restraint”);

 

   

the expiration or termination of all waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”) applicable to the Transactions, and any commitment to, or agreement with, any governmental entity to delay the consummation of, or not to consummate before a certain date, the Transactions, and the receipt of all clearances, consents and approvals under certain specified antitrust regulatory laws in Australia, Brazil, Canada, Mexico, New Zealand, Norway, Saudi Arabia and the United Kingdom;

 

   

if determined by SLB to be required or warranted, the approval of the Committee on Foreign Investment in the United States and each member agency thereof acting in such capacity (“CFIUS”);

 

   

the effectiveness of the registration statement of which this proxy statement/prospectus is a part, and the absence of any stop order or proceeding seeking a stop order relating to such effectiveness;

 

   

performance in all material respects by each of SLB, Holdco and Merger Sub, on the one hand, and ChampionX, on the other hand, of its respective covenants and agreements required to be performed by it under the Merger Agreement at or prior to the closing date;

 

   

representations and warranties of SLB, Holdco and Merger Sub, on the one hand, and ChampionX, on the other hand, contained in the Merger Agreement being true and correct as of the date of the Merger Agreement and as of the closing date, subject to certain materiality thresholds; and

 

   

the receipt by each party of a certificate signed by the Chief Executive Officer or another senior officer of the other party certifying to the effect that the conditions specified in the preceding two bullets have been satisfied.

The obligations of SLB to effect the Merger will also be subject to the fulfillment of the following conditions on or prior to the closing date:

 

   

the absence of specified regulatory laws (as set forth in the ChampionX disclosure schedules to the Merger Agreement) enjoining, prohibiting, preventing or making illegal the consummation of the Transactions (each, a “Specified Legal Restraint”);

 

17


Table of Contents
   

the absence of an investigation of the Transactions under the specified regulatory laws discussed above;

 

   

the expiration or termination of all waiting periods (and any extensions thereof) applicable following SLB’s determination to submit a filing in respect of the Transactions under any specified regulatory laws applicable to the Transactions (the “Specified Regulatory Filings”) and any agreement with any governmental entity to delay the consummation of, or not to consummate before a certain date, the Transactions;

 

   

the receipt of all clearances, consents and approvals required under the Specified Regulatory Filings;

 

   

the absence of any regulatory law entered, issued, enforced, promulgated, adopted or effective after the date of the Merger Agreement (A) that enjoins, prohibits, prevents or makes illegal consummation of the Transactions, (B) pursuant to which an investigation of the Transactions will have been commenced and be continuing, (C) under which an applicable waiting period (or extensions thereof) with respect to the Transactions or any commitment to, or agreement with, any governmental entity to delay the consummation of, or not to consummate before a certain date, the Transactions, will be continuing, or (D) under which any required clearance, consent or approval required will not have been obtained or fail to remain in full force and effect.

Regulatory Approvals Required for the Merger

The Merger is subject to review by antitrust regulators in the United States under the HSR Act. Under the HSR Act, SLB and ChampionX are required to make premerger notification filings and to await the expiration or early termination of the statutory waiting period (and any extension of the waiting period) prior to completing the Merger. On April 23, 2024, SLB and ChampionX each filed a Premerger Notification and Report Form under the HSR Act.

The Merger is also subject to antitrust review by government authorities in several non-U.S. jurisdictions, including Australia, Brazil, Canada, Mexico, New Zealand, Norway, Saudi Arabia and the United Kingdom. The parties have made or may make additional antitrust filings in certain other jurisdictions outside the United States.

The Merger may be subject to certain regulatory requirements of other municipal, U.S. state and federal, U.S. or non-U.S. governmental agencies and authorities, including those relating to the offer and sale of securities. SLB and ChampionX are currently working to evaluate and comply in all material respects with these requirements, as appropriate, and do not currently anticipate that they will hinder, delay or restrict completion of the Merger.

Under the terms of the Merger Agreement, SLB has sole discretion in deciding whether to litigate, defend against, or otherwise contest any action by any governmental entity relating to the Transactions pursuant to or under the antitrust laws of the United States. SLB and its affiliates agreed to use their reasonable best efforts, subject to certain limitations, to resolve any objections and avoid or eliminate each impediment that a governmental entity (other than CFIUS) may assert under applicable regulatory laws with respect to the Transactions to enable the consummation of the Merger to occur as promptly as practicable (and in any event no later than April 2, 2025, which termination date will, if certain other conditions, including a certain condition at the election of SLB (such election, an “Extension Election”), have not been satisfied, be automatically extended to October 2, 2025 (such date, as applicable, the “End Date”)). However, SLB and its affiliates will not be obligated to take remedial actions for purposes of resolving any such objection or avoiding or eliminating any such impediment, except to the extent that such remedial action (i) does not involve any businesses, assets, equity interests, product lines, properties, contracts, agreements, commercial arrangements, relationships, ventures, rights or obligations of SLB or its affiliates or the Chemical Technologies business of ChampionX and its subsidiaries and (ii) would not, and would not reasonably be expected to, individually or in the aggregate, result in a loss of more than 8% of the aggregate annual revenues of ChampionX and its subsidiaries, taken as a whole, as measured by the 12 months ended December 31, 2023.

 

18


Table of Contents

No Solicitation by ChampionX

Subject to certain limited exceptions, the Merger Agreement provides that ChampionX is not permitted to, among other things, directly or indirectly, solicit, initiate, seek or knowingly encourage or knowingly facilitate (including by way of furnishing non-public information) any proposal or offer or any inquiries regarding the making or submission of any proposal or offer, including any proposal or offer to ChampionX’s stockholders, that constitutes, or would reasonably be expected to lead to, a ChampionX Acquisition Proposal (as defined in the section entitled “The Merger Agreement—Certain Additional Agreements—No Solicitation; Recommendation”).

No Change of Recommendation by ChampionX

The Merger Agreement also provides that, at any time prior to receipt of the ChampionX Stockholder Approval, the ChampionX Board may make a Change of Recommendation (as defined in the section entitled “The Merger Agreement—Certain Additional Agreements—No Solicitation; Recommendation”) if (and only if):

 

   

(A) a written ChampionX Acquisition Proposal that did not result from a material breach of ChampionX’s non-solicitation obligations under the Merger Agreement is made by a third party after entry into the Merger Agreement, and such ChampionX Acquisition Proposal is not withdrawn, (B) the ChampionX Board determines in good faith after consultation with its financial advisors and outside legal counsel that such ChampionX Acquisition Proposal constitutes a Superior Offer (as defined in the section entitled “The Merger Agreement—Certain Additional Agreements—No Solicitation; Recommendation”) and (C) following consultation with outside legal counsel, the ChampionX Board determines that the failure to make a Change of Recommendation would constitute a breach of its fiduciary duties under applicable law or ChampionX’s second amended and restated certificate of incorporation or amended and restated by-laws; and

 

   

(A) ChampionX provides SLB four business days’ prior written notice of its intention to take such action, (B) after providing such notice and prior to making such Change of Recommendation in connection with a Superior Offer, ChampionX has negotiated in good faith with SLB during such four business day period to make such revisions to the terms of the Merger Agreement, such that the ChampionX Acquisition Proposal ceases to constitute a Superior Offer, and (C) the ChampionX Board has considered in good faith any changes to the terms of the Merger Agreement committed to in writing by SLB, and following such four business day period, has determined in good faith, after consultation with its outside legal counsel and financial advisors, that the ChampionX Acquisition Proposal would continue to constitute a Superior Offer if such changes to the terms of the Merger Agreement proposed in writing by SLB were to be given effect.

The ChampionX Board may also make a Change of Recommendation in certain other circumstances in relation to an Intervening Event as defined in the section entitled “The Merger Agreement—Certain Additional Agreements.”

The circumstances under which the ChampionX Board may make a Change of Recommendation are described in more detail in the section of this proxy statement/prospectus entitled “The Merger Agreement—Certain Additional Agreements—No Solicitation; Recommendation.”

Termination of the Merger Agreement

The Merger Agreement may be terminated at any time prior to the Effective Time, notwithstanding the adoption of the Merger Agreement by ChampionX’s stockholders (except as described below):

 

   

by mutual written agreement of SLB and ChampionX;

 

19


Table of Contents
   

by either SLB or ChampionX if:

 

   

the Merger has not occurred on or before the End Date; however, neither party may terminate the Merger Agreement under this provision if the failure of the Merger to occur on or before the End Date was due to that party’s material breach of any provision of the Merger Agreement.

 

   

closing would violate any final and non-appealable Mutual Legal Restraint; however, neither party may terminate the Merger Agreement under this provision if that party’s failure to perform any of its obligations under the Merger Agreement contributed, in any material respect, to the issuance or continued existence of such Mutual Legal Restraint; or

 

   

the ChampionX stockholders do not approve the Merger Proposal at the ChampionX Special Meeting or any adjournment or postponement of the ChampionX Special Meeting;

 

   

by ChampionX, if SLB, Holdco, or Merger Sub is in breach of its representations or warranties or failed to perform its covenants or other agreements contained in the Merger Agreement such that the conditions to the Merger Agreement would not be satisfied, and such breach (A) is not cured within 30 days following written notice thereof to SLB, (B) by its nature or timing cannot be cured during such period, or (C) is not curable prior to the End Date.

 

   

by SLB if:

 

   

ChampionX is in breach of its representations or warranties or failed to perform its covenants or other agreements contained in the Merger Agreement such that the conditions to the Merger Agreement would not be satisfied, and such breach (A) is not cured within 30 days following written notice thereof to ChampionX, (B) by its nature or timing cannot be cured during such period, or (C) is not curable prior to the End Date;

 

   

the ChampionX Board has made a Change of Recommendation prior to receipt of the ChampionX Stockholder Approval; or

 

   

closing would violate any final and non-appealable Specified Legal Restraint; however, SLB may not terminate the Merger Agreement under this provision if its failure to perform any of its obligations under the Merger Agreement contributed, in any material respect, to the issuance or continued existence of such Specified Legal Restraint.

Termination Fee and Expenses

The Merger Agreement also provides for the payment of a termination fee by ChampionX to SLB if the agreement is terminated in specified circumstances. ChampionX will be obligated to pay SLB a $265.4 million termination fee if:

 

   

prior to the ChampionX Special Meeting, a ChampionX Acquisition Proposal (except that all references to 20% in such definition shall be changed to 50%) is publicly disclosed after the date of the Merger Agreement;

 

   

the Merger Agreement is terminated because (A) the Merger Agreement has not been consummated on or prior to the End Date, (B) a vote on the Merger Proposal by ChampionX stockholders has not yielded approval, or (C) ChampionX has breached its representations or warranties or failed to perform its covenants or other agreements contained in the Merger Agreement such that the conditions to the Merger Agreement would not be satisfied, and such breach (1) is not cured within 30 days following written notice thereof to SLB, (2) by its nature or timing cannot be cured during such period, or (3) is not curable prior to the End Date, and such breach was a result of ChampionX’s failure to convene and hold the ChampionX Special Meeting in violation of the Merger Agreement or a breach of ChampionX’s non-solicitation and “no-shop” obligations;

 

20


Table of Contents
   

such ChampionX Acquisition Proposal (except that all references to 20% in such definition shall be changed to 50%) has not been withdrawn prior to termination; and

 

   

within 12 months after such termination, ChampionX consummates or enters into a definitive agreement to consummate an alternative transaction.

The Merger Agreement also provides for the payment of a termination fee by SLB to ChampionX if the agreement is terminated in specified circumstances. SLB will be obligated to pay ChampionX a $326.6 million termination fee if the agreement is terminated:

 

   

by either party because the Merger Agreement has not been consummated on or prior to the End Date and, subject to certain exceptions, parties will have satisfied conditions to the Merger;

 

   

by either party because closing would violate any final and non-appealable Mutual Legal Restraint; however, neither party may terminate the Merger Agreement under this provision if that party’s failure to perform any of its obligations under the Merger Agreement contributed, in any material respect, to the issuance or continued existence of such Mutual Legal Restraint; or

 

   

by SLB if the Merger Agreement has not been consummated on or prior to the End Date and it does not exercise its right to an election to extend the End Date pursuant to the Merger Agreement (an “Election Extension”).

Payment of Dividends

SLB

SLB paid quarterly cash dividends of $0.25 per share of SLB common stock during 2023. On January 19, 2024, the SLB Board approved an increase to SLB’s quarterly cash dividend to $0.275 per share of SLB common stock, which was most recently paid on April 4, 2024. The terms of the Merger Agreement limit the ability of SLB to authorize or pay additional dividends, except for regular quarterly cash dividends on SLB common stock consistent with past practice (including any historical increases in such cash dividends).

ChampionX

ChampionX has paid quarterly cash dividends of between $0.075 and $0.085 per share of ChampionX common stock since the first quarter of 2023. On January 31, 2024, the ChampionX Board approved an increase of the quarterly cash dividend to $0.095 per share of ChampionX common stock, which was most recently paid on April 26, 2024. Pursuant to the terms of the Merger Agreement, between the signing of the Merger Agreement and the closing date, ChampionX may continue to pay its regular quarterly cash dividends with customary record and payment dates, subject to certain exceptions.

Material U.S. Federal Income Tax Consequences of the Merger

The exchange of ChampionX common stock for SLB common stock in the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, subject to the discussion below relating to the potential application of Section 304 of the Code under the section titled The Merger—Material U.S. Federal Income Tax Consequences, a U.S. Holder (as defined in the section titled The Merger—Material U.S. Federal Income Tax Consequences) generally will recognize capital gain or loss equal to the difference, if any, between (1) the sum of the fair market value of SLB common stock received by such U.S. Holder in the Merger and any cash received in lieu of fractional shares of ChampionX common stock, and (2) the U.S. Holder’s adjusted tax basis in its ChampionX common stock.

 

21


Table of Contents

Except in certain specific circumstances (including as a result of the potential application of Section 304 of the Code) described in “The Merger—Material U.S. Federal Income Tax Consequences,” a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain recognized on the exchange of ChampionX common stock for SLB common stock in the Merger.

Please refer to the section entitled “The Merger—Material U.S. Federal Income Tax Consequences” of this proxy statement/prospectus for a description of the material U.S. federal income tax consequences of the Merger. Determining the actual tax consequences of the Merger to you may be complex and will depend on your specific situation. You should consult your tax advisor for a full understanding of the tax consequences of the Merger to you.

Accounting Treatment

In accordance with accounting principles generally accepted in the United States, SLB will account for the Merger as an acquisition of the ChampionX business.

Exchange of Shares

The conversion of ChampionX common stock into the right to receive the Equity Consideration will occur automatically at the Effective Time. Immediately prior to the Effective Time, SLB will issue to Holdco, by way of sale or as a contribution (through the relevant intermediate entity(ies)) to the capital of Holdco or a combination thereof, that number of shares of SLB common stock that are to be delivered by Holdco to the holders of ChampionX common stock pursuant to the Merger Agreement. Each share of ChampionX common stock issued and outstanding immediately prior to the Effective Time (other than ChampionX Excluded Stock) will be converted into the right to receive 0.735 shares of SLB common stock.

Promptly after the Effective Time (but in any event no later than the 3rd business day following the Effective Time), Holdco will instruct the exchange agent to mail to each record holder of shares of ChampionX common stock as of the Effective Time a letter of transmittal and instructions for use in effecting the surrender of the shares of ChampionX common stock in exchange for the Equity Consideration.

Any portion of the Equity Consideration that remains undistributed to the former holders of ChampionX common stock for 12 months after the Effective Time will be delivered to Holdco upon demand, and any remaining former holders of shares of ChampionX common stock will thereafter look only to Holdco for payment of the Equity Consideration. Any amounts remaining unclaimed by former holders of shares of ChampionX common stock immediately prior to such time as such amounts would otherwise escheat to or become the property of any governmental entity will, to the extent permitted by applicable law, become the property of Holdco.

Comparison of Rights of SLB Shareholders and ChampionX Stockholders

The rights of ChampionX stockholders are currently governed by ChampionX’s second amended and restated certificate of incorporation and amended and restated by-laws and the General Corporation Law of the State of Delaware. ChampionX stockholders who receive shares of SLB common stock in the Merger will become SLB shareholders upon the closing date, and their rights as such will be governed by SLB’s articles of incorporation and amended and restated by-laws and the Curaçao Civil Code. The differences between the ChampionX common stock and SLB common stock are described in detail in the section entitled “Comparison of Stockholder Rights.”

Comparative Per Share Market Price And Dividend Information

The following table sets forth, for the periods indicated, the intra-day high and low sales prices per share for SLB as reported on the NYSE, which is the principal trading market for SLB common stock, and ChampionX

 

22


Table of Contents

common stock as reported on the Nasdaq, which is the principal trading market for ChampionX common stock, and the cash dividends declared per share of SLB common stock and ChampionX common stock.

 

     SLB Common Stock      ChampionX Common Stock  
     High      Low      Cash
Dividends
Declared
     High      Low      Cash
Dividends
Declared
 

2024

                 

Second Quarter (through May 14, 2024)

   $ 55.65      $ 47.78      $ 0.275      $ 39.95      $ 33.79        —   

First Quarter

   $ 55.69      $ 46.91      $ 0.275      $ 36.56      $ 25.46      $ 0.095  

2023

                 

Fourth Quarter

   $ 61.20      $ 48.09      $ 0.25      $ 35.69      $ 28.04      $ 0.085  

Third Quarter

   $ 62.12      $ 48.31      $ 0.25      $ 38.37      $ 30.25      $ 0.085  

Second Quarter

   $ 53.81      $ 42.73      $ 0.25      $ 31.51      $ 24.98      $ 0.085  

First Quarter

   $ 59.45      $ 43.82      $ 0.25      $ 33.65      $ 23.66      $ 0.085  

2022

                 

Fourth Quarter

   $ 56.04      $ 37.32      $ 0.175      $ 33.13      $ 19.95      $ 0.075  

Third Quarter

   $ 40.90      $ 30.65      $ 0.175      $ 23.87      $ 16.64      $ 0.075  

Second Quarter

   $ 49.83      $ 34.37      $ 0.175      $ 26.02      $ 18.42      $ 0.075  

First Quarter

   $ 46.27      $ 29.98      $ 0.125      $ 26.98      $ 19.88      $ 0.075  

2021

                 

Fourth Quarter

   $ 34.99      $ 27.65      $ 0.125      $ 28.08      $ 19.00        —   

Third Quarter

   $ 33.56      $ 25.90      $ 0.125      $ 26.92      $ 20.02        —   

Second Quarter

   $ 36.87      $ 24.52      $ 0.125      $ 30.48      $ 18.26        —   

First Quarter

   $ 30.41      $ 21.23      $ 0.125      $ 25.59      $ 14.80        —   

The following table sets forth the closing sale price per share of SLB common stock as reported on the NYSE and ChampionX common stock as reported on the Nasdaq as of April 1, 2024, the last trading day before the public announcement of the Merger, and as of May 14, 2024, the most recent practicable trading day prior to the date of this proxy statement/prospectus. The table also shows the implied value of the Equity Consideration proposed for each share of ChampionX common stock as of the same dates. This implied value was calculated by multiplying the product of the closing sale price of SLB common stock on the relevant date by the Exchange Ratio of 0.735.

 

     SLB
Closing Price
     ChampionX
Closing Price
     Equivalent
Per Share Value
 

April 1, 2024

   $ 55.22      $ 35.40      $ 40.59  

May 14, 2024

   $ 48.62      $ 34.38      $ 35.74  

The market prices of SLB common stock and ChampionX common stock will fluctuate between the date of this proxy statement/prospectus and the completion of the Merger. No assurance can be given concerning the market prices of SLB common stock or ChampionX common stock before the completion of the Merger or SLB common stock after the completion of the Merger. Because the Exchange Ratio is fixed in the Merger Agreement, the market value of the SLB common stock that ChampionX stockholders will receive in connection with the Merger may vary significantly from the prices shown in the table above. Accordingly, ChampionX stockholders are advised to obtain current market quotations for SLB common stock and ChampionX common stock before deciding whether to vote for the Merger Proposal.

 

23


Table of Contents

RISK FACTORS

By voting in favor of the Merger Proposal, ChampionX stockholders will be choosing to invest in SLB common stock. An investment in SLB common stock involves certain risks. Before deciding how to vote, ChampionX stockholders should carefully consider the risks described below, those described in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” and the other information contained in this proxy statement/prospectus or in the documents of ChampionX and SLB incorporated by reference into this proxy statement/prospectus, particularly the risk factors set forth in the documents of ChampionX and SLB incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information.” In addition to the risks set forth below, new risks may emerge from time to time and it is not possible to predict all risk factors, nor can ChampionX or SLB assess the impact of all factors on the Merger and the Combined Company following the Merger or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in or implied by any forward-looking statements.

Risks Relating to the Merger

Because the Exchange Ratio is fixed and will not be adjusted in the event of any change in either ChampionX’s or SLB’s stock price, the number of shares of SLB common stock to be received by ChampionX stockholders in connection with the Merger will not change between now and the time the Merger is completed to reflect changes in the trading prices of SLB common stock or ChampionX common stock.

Pursuant to the Merger Agreement, at the Effective Time, each share of ChampionX common stock issued and outstanding immediately prior to the Effective Time (other than ChampionX Excluded Shares) will be converted, without any action on the part of the holder thereof, into the right to receive 0.735 shares of SLB common stock. The Exchange Ratio is fixed in the Merger Agreement and will not be adjusted for changes in the market price of either ChampionX common stock or SLB common stock, which means that the value of the Equity Consideration will depend in part on the price per share of SLB common stock at the time the Merger is completed. Changes in the price of SLB common stock prior to the Merger will affect the market value of the Equity Consideration that ChampionX stockholders will become entitled to receive on the date of the Merger. Neither party is permitted to abandon the Merger or terminate the Merger Agreement solely because of changes in the market price of either party’s common stock. Stock price changes may result from a variety of factors (many of which are beyond ChampionX’s or SLB’s control), including:

 

   

changes in ChampionX’s and SLB’s respective business, operations and prospects;

 

   

changes in market assessments of the business, operations and prospects of either company;

 

   

market assessments of the likelihood that the Merger will be completed, including related considerations regarding regulatory approvals of the Merger;

 

   

interest rates, general market, industry and economic conditions and other factors generally affecting the price of ChampionX common stock and SLB common stock, including sales prices for oil and gas; and

 

   

federal, state and local legislation, governmental regulation and legal developments in the businesses in which ChampionX and SLB operate.

The price of SLB common stock at the completion of the Merger may vary from its price on the date the Merger Agreement was executed, on the date of this proxy statement/prospectus and on the date of the ChampionX Special Meeting. As a result, the market value represented by the Exchange Ratio will also vary. For example, based on the range of closing prices of SLB common stock during the period from April 1, 2024 (the last trading day before the public announcement of the Merger), through May 14, 2024 (the most recent practicable trading day before the date of this proxy statement/prospectus), the Exchange Ratio represented a market value ranging from a low of $35.12 to a high of $40.90 for each share of ChampionX common stock.

 

24


Table of Contents

Because the date that the Merger is completed will be later than the date of the ChampionX Special Meeting, at the time of the ChampionX Special Meeting, ChampionX stockholders will not know the exact market value of the SLB common stock that they will receive upon completion of the Merger.

If the price of SLB common stock declines between the date of the ChampionX Special Meeting and the Effective Time, including for any of the reasons described above, ChampionX stockholders will receive shares of SLB common stock that have a market value upon completion of the Merger that is less than the market value calculated pursuant to the Exchange Ratio on the date of the ChampionX Special Meeting. Therefore, while the number of shares of SLB common stock to be issued and delivered in the Merger is fixed, ChampionX stockholders cannot be sure of the market value of the SLB common stock they will receive upon completion of the Merger. In addition, the market value of the shares of SLB common stock that ChampionX stockholders will be entitled to receive in the Merger also may fluctuate after the completion of the Merger and ChampionX stockholders could lose some or all of the value of the SLB common stock they receive.

The market price for SLB common stock may be affected by factors different from those that historically have affected the market price of ChampionX common stock.

Upon the completion of the Merger, ChampionX stockholders will become SLB shareholders. SLB’s business differs from, and is complementary to, that of ChampionX, and, accordingly, the financial position or results of operations of SLB following the Merger will be affected by certain factors that are different from those currently affecting the financial position or results of operations of ChampionX. As such, the future market price and performance of SLB common stock is likely to be different from that of the historical market price and performance and ChampionX common stock. For a discussion of the businesses of SLB and ChampionX and of some important factors to consider in connection with those businesses, see the section entitled “Where You Can Find More Information” for the location of information incorporated by reference into this proxy statement/prospectus.

ChampionX stockholders will have a significantly reduced ownership and voting interest in the Combined Company after the Merger and will exercise less influence over the Combined Company’s management.

Upon the completion of the Merger, it is expected that ChampionX stockholders, who collectively own 100% of ChampionX, will own approximately 9% of SLB common stock, based on the number of shares of ChampionX common stock and SLB common stock outstanding as of the record date. Consequently, ChampionX stockholders will have less influence over the management and policies of SLB than they currently have over the management and policies of ChampionX.

ChampionX’s directors and executive officers have interests in the Merger that may be different from, and in addition to, the interests of other ChampionX stockholders.

You should be aware that ChampionX’s directors and executive officers are parties to agreements or participants in other arrangements that give them interests in the Merger that may be different from, or in addition to, the interests of the other ChampionX stockholders, which could create conflicts of interest in their determinations to recommend the Merger. The ChampionX Board was aware of these interests and considered them, among other matters, in approving the Merger Agreement and the Transactions and making its recommendation that ChampionX stockholders vote in favor of the Merger Proposal. ChampionX stockholders should consider these interests in voting on the Merger. See the sections entitled “The Merger—Interests of ChampionX’s Directors and Executive Officers in the Merger” and “Advisory Vote on Merger-Related Compensation for ChampionX’s Named Executive Officers” for additional details regarding these interests.

SLB and ChampionX will be subject to business uncertainties and certain operating restrictions until the completion of the Merger.

Under the terms of the Merger Agreement, ChampionX and SLB have each agreed to refrain from taking certain actions with respect to their business and financial affairs during the pendency of the Merger, which restrictions

 

25


Table of Contents

could be in place for an extended period of time if completion of the Merger is delayed and could adversely impact ChampionX’s and SLB’s ability to execute certain of their business strategies and their financial condition, results of operations or cash flows. During the pendency of the Merger, some of the suppliers and customers of ChampionX and/or SLB may delay or defer sales and purchasing decisions, which could negatively impact revenues, earnings and cash flows regardless of whether the Merger is completed. See the section entitled “The Merger Agreement—Conduct of Business Pending the Effective Time” for a description of the restrictive covenants to which each of SLB and ChampionX is subject.

ChampionX may be unable to attract and retain key employees during the pendency of the Merger.

Current and prospective employees of ChampionX may experience uncertainty about their future roles with the Combined Company following the Merger, which may have an adverse effect on the ability of ChampionX to attract and retain key personnel during the pendency of the Merger. Key employees may depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the Combined Company following the Merger. Accordingly, no assurance can be given that ChampionX will be able to attract and retain key employees to the same extent that ChampionX has been able to in the past.

The ability of ChampionX and SLB to complete the Merger is subject to the approval of ChampionX stockholders, certain closing conditions and the receipt of certain regulatory approvals and clearances that may impose conditions that could adversely affect ChampionX or SLB or cause the Merger to be abandoned.

The Merger Agreement contains certain customary closing conditions, including approval of the Merger Agreement by ChampionX stockholders, the absence of certain injunctions or other legal restraints, the receipt of approval for listing on the NYSE of the shares of SLB common stock as Equity Consideration and such other shares of SLB common stock to be reserved for issuance in connection with the Merger, subject to official notice of issuance, and certain other customary conditions relating to the parties’ representations and warranties in the Merger Agreement and the performance of their respective obligations.

In addition, ChampionX and SLB will be unable to complete the Merger until the expiration or termination of the applicable waiting period under the HSR Act and any commitment to, or agreement with, any governmental entity to delay the consummation of, or not to consummate before a certain date, the Transactions, and the receipt of consents and approvals under certain specified antitrust regulatory laws in Australia, Brazil, Canada, Mexico, New Zealand, Norway, Saudi Arabia and the United Kingdom. Regulatory entities may attempt to impose certain requirements or obligations as conditions for their approval. Consistent with the Merger Agreement, the parties may agree to conditions from these regulators that could adversely impact the Combined Company. If the regulatory clearances are not received, or they are not received on terms that satisfy the conditions set forth in the Merger Agreement, then neither SLB nor ChampionX will be obligated to complete the Merger.

There can be no assurance that the various closing conditions will be satisfied and that the necessary approvals will be obtained, or that any required conditions, requirements or obligations will not materially adversely affect the Combined Company following the Merger. In addition, there can be no assurance that these conditions will not result in the abandonment or delay of the Merger. Any delay in completing the Merger could cause the Combined Company not to realize, or delay the realization of, some or all of the benefits that are expected to be achieved from the Merger. In such context, the date on which the ChampionX stockholders will receive the Equity Consideration is also uncertain.

SLB or ChampionX may waive one or more of the closing conditions without ChampionX re-soliciting stockholder approval.

SLB or ChampionX may determine to waive, in whole or in part, one or more of the conditions to SLB or ChampionX, as the case may be, being obligated to consummate the Merger. Each of SLB and ChampionX currently expects to evaluate the materiality of any waiver and its effect on its respective shareholders/

 

26


Table of Contents

stockholders in light of the facts and circumstances at the time to determine whether any amendment of this proxy statement/prospectus or any re-solicitation of proxies by ChampionX is required in light of such waiver. Any determination whether to waive any condition to the consummation of the Merger or of ChampionX to re-solicit stockholder approval or amending or supplementing this proxy statement/prospectus as a result of a waiver will be made by SLB and/or ChampionX at the time of such waiver based on the facts and circumstances as they exist at that time.

Litigation relating to the Merger could result in an injunction preventing completion of the Merger and substantial costs to SLB and ChampionX, and/or may adversely affect the Combined Company’s business, financial condition or results of operations following the Merger.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or other business combination agreements. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on SLB’s and ChampionX’s respective liquidity and financial condition.

Lawsuits that may be brought against SLB, ChampionX or their respective directors could also seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the Merger Agreement already implemented and to otherwise enjoin the parties from consummating the Merger. One of the conditions to the consummation of the Merger is the absence of certain legal restraints, including an order or injunction under certain applicable laws that enjoins, prohibits, prevents, or makes illegal the consummation of the Transactions. Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, that injunction may delay or prevent the Merger from being completed within the expected timeframe or at all, which may adversely affect SLB’s and ChampionX’s respective business, financial condition, results of operations and cash flows.

There can be no assurance that any of the defendants will be successful in the outcome of any pending or any potential future lawsuits. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger is completed may adversely affect SLB’s and ChampionX’s respective business, financial condition, results of operations and cash flows.

SLB shareholders and ChampionX stockholders will not be entitled to appraisal rights in the Merger.

Holders of SLB common stock and ChampionX common stock will not have appraisal rights in connection with the Merger, as more fully described in “The Merger —Appraisal Rights.”

The opinion of ChampionX’s financial advisor does not and will not reflect changes in circumstances between the signing of the Merger Agreement and the completion of the Merger.

The ChampionX Board received an opinion from ChampionX’s financial advisor in connection with the signing of the Merger Agreement. Please refer to the section entitled “Opinion of ChampionX’s Financial Advisor” for additional information. However, ChampionX has not obtained any updated opinion from its financial advisor as of the date of this proxy statement/prospectus. Changes in the operations and prospects of ChampionX or SLB, general market and economic conditions and other factors that may be beyond the control of ChampionX or SLB, and on which the financial advisor’s opinion was based, may significantly alter the value of ChampionX or SLB or the prices of their respective stock by the time the Merger is completed. The opinion does not speak as of the time the Merger will be completed or as of any date other than the date of such opinion. Because ChampionX does not currently anticipate asking its financial advisor to update its opinion, such opinion will not address the fairness, from a financial point of view, to the holders of ChampionX common stock (other than holders of shares of ChampionX Excluded Stock or any shares of ChampionX common stock held by an affiliate of ChampionX or SLB) of the Exchange Ratio at the time the Merger is completed or as of the date of this proxy statement/

 

27


Table of Contents

prospectus. The ChampionX Board’s recommendation that ChampionX stockholders vote in favor of the Merger Proposal, the Compensation Proposal and the Adjournment Proposal, however, are made as of the date of this proxy statement/prospectus.

The financial projections prepared by ChampionX management are based on various assumptions that may not be realized.

The Forecasts included under the section “The Merger—ChampionX Unaudited Prospective Financial Information Reviewed by the ChampionX Board and Centerview” of this proxy statement/prospectus were based on assumptions of, and information available to, ChampionX management when prepared, and those estimates and assumptions are subject to uncertainties, many of which are beyond ChampionX’s control and may not be realized. Many factors mentioned in this proxy statement/prospectus, including the risks outlined in this “Risk Factors” section and the events or circumstances described under the section entitled “Cautionary Statement Regarding Forward-Looking Statements” of this proxy statement/prospectus, will be important in determining the Combined Company’s future results. As a result of these contingencies, actual future results may vary materially from the estimates. In view of these uncertainties, the inclusion of financial estimates in this proxy statement/prospectus is not and should not be viewed as a representation that the forecasted results will necessarily reflect actual future results. None of ChampionX or its affiliates, advisors, officers, directors, partners or representatives can give you any assurance that actual results will not differ materially from the Forecasts, and none of them undertake any obligation to update or otherwise revise or reconcile the projections to reflect circumstances existing after the date the projections were generated or to reflect the occurrence of future events.

The Forecasts included under the section entitled “The Merger—ChampionX Unaudited Prospective Financial Information Reviewed by the ChampionX Board and Centerview” of this proxy statement/prospectus were not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information. Further, any forward-looking statement speaks only as of the date on which it is made and does not take into consideration the impact of events and circumstances occurring after such date. Neither ChampionX nor SLB undertakes any obligation, other than as required by applicable law, to update the financial estimates herein to reflect events or circumstances after the date those financial estimates were prepared or to reflect the occurrence of anticipated or unanticipated events or circumstances. None of ChampionX’s, SLB’s or any other independent accountants have compiled, examined or performed any procedures with respect to such information, nor have any independent accountants expressed any opinion or any other form of assurance on such information or achievability thereof, and, accordingly, such independent accountants assume no responsibility for, and disclaim any association with, such forward-looking financial information. The audit reports of PricewaterhouseCoopers LLP incorporated by reference herein relate exclusively to the historical financial information of the entities named in those reports and do not cover any other information in this proxy statement/prospectus and should not be read to do so. See the section entitled “The Merger—ChampionX Unaudited Prospective Financial Information Reviewed by the ChampionX Board and Centerview” for more information.

The Merger Agreement contains restrictions on the ability of ChampionX to pursue other alternatives to the Merger.

The Merger Agreement contains provisions that make it more difficult for ChampionX to sell its business to a party other than SLB. Specifically, the Merger Agreement contains non-solicitation provisions that, subject to limited exceptions, restrict the ability of ChampionX to solicit, initiate, knowingly encourage or knowingly facilitate any competing acquisition proposal. Further, subject to limited exceptions, consistent with applicable law, the Merger Agreement provides that the ChampionX Board will not withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, modify or qualify, in any manner adverse to SLB, its recommendation that ChampionX stockholders vote in favor of the Merger Proposal. In specified circumstances, SLB has a right to negotiate with ChampionX in order to match any competing acquisition proposals that may be

 

28


Table of Contents

made. Although the ChampionX Board is permitted to take certain actions in response to a superior proposal or a competing acquisition proposal that is reasonably likely to result in a superior proposal if it determines that the failure to do so would be inconsistent with its fiduciary duties, doing so in specified situations could give SLB the right to terminate the Merger Agreement and require ChampionX to pay to SLB a termination fee of $265.4 million. See the section entitled “The Merger Agreement—Certain Additional Agreements—No Solicitation; Recommendation,” the section entitled “The Merger Agreement—Termination, Amendment and Waiver—Termination” and the section entitled “The Merger Agreement—Termination, Amendment and Waiver—Fees and Expenses” for a more complete discussion of these restrictions and consequences.

Such provisions could discourage a potential acquiror that might have an interest in making a proposal from considering or proposing any such acquisition, even if it were prepared to pay consideration with a higher value than that to be paid in the Merger. There also is a risk that the requirement for ChampionX to pay the termination fee to SLB in certain circumstances may result in a potential acquiror proposing to pay a lower per share price to acquire ChampionX than it might otherwise have proposed to pay.

Completion of the Merger may trigger change in control or other provisions in certain agreements to which ChampionX or any of its respective subsidiaries or joint ventures is a party.

The completion of the Merger may trigger change in control or other provisions in certain agreements to which ChampionX or any of its respective subsidiaries or joint ventures is a party. If ChampionX is unable to negotiate waivers of those provisions, the counterparties may exercise their rights and remedies under such agreements, potentially terminate such agreements, or seek monetary damages. Even if ChampionX is able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate such agreements on terms less favorable to ChampionX or the applicable subsidiary or joint venture. If ChampionX’s suppliers were to seek to terminate or modify their supplier arrangements, then ChampionX or its respective subsidiaries or joint ventures may be unable to procure necessary supplies or services from other suppliers in a timely and efficient manner and on acceptable terms, or at all.

SLB and ChampionX may be unable to complete the Merger.

If the Merger is not completed for any reason, including as a result of failure to obtain required regulatory approvals or if the ChampionX stockholders fail to approve the Merger Proposal, the market price of SLB common stock and ChampionX common stock may be adversely affected and, without realizing any of the benefits of having completed the Merger, SLB and ChampionX would be subject to a number of risks, including: (i) SLB and ChampionX may experience negative reactions from the financial markets, customers, suppliers and other constituencies, (ii) SLB and ChampionX will still be required to pay certain significant costs relating to the Merger such as legal, accounting, financial advisor, and printing fees and (iii) if the Merger is terminated under certain circumstances, ChampionX may be required to pay SLB a termination fee of $265.4 million or SLB may be required to pay ChampionX a termination fee of $326.6 million. In addition, SLB or ChampionX may elect to terminate the Merger Agreement in accordance with its terms in certain circumstances as described in the section entitled “The Merger Agreement—Termination; Amendment and Waiver.”

Risks Relating to the Combined Company Upon Completion of the Merger

The Combined Company could incur substantial expenses related to the Merger and the integration of ChampionX and SLB.

ChampionX and SLB expect that the Combined Company will incur substantial expenses in connection with the Merger and the integration of their respective businesses, policies, procedures, operations, technologies and systems. In addition, the Combined Company will be required to devote management attention and resources to integrating its business practices and operations, and prior to the Merger, management attention and resources will be required to plan for such integration. There are a large number of systems that must be integrated,

 

29


Table of Contents

including information management, purchasing, accounting and finance, sales, billing, payroll and benefits, and regulatory compliance. There are a number of factors beyond the control of either party that could affect the total amount or the timing of all of the expected integration expenses. Moreover, many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. These expenses could, particularly in the near term, reduce the savings that SLB expects to achieve from the elimination of duplicative expenses, as well as delay the realization of economies of scale, cost savings and revenue enhancements related to the integration of the businesses following the completion of the Merger. Accordingly, any anticipated net benefits may not be achieved in the near term or at all. These integration expenses may result in the Combined Company taking significant charges against earnings following the completion of the Merger. Furthermore, there can be no assurance that the elimination of certain duplicative costs, as well as the realization of other efficiencies related to the integration of the two businesses, will offset the incremental transaction-related costs over time.

Following the Merger, the Combined Company may be unable to successfully integrate ChampionX’s and SLB’s businesses and realize the anticipated benefits or synergies of the Merger.

The Merger involves the combination of two companies that historically have operated and currently operate as independent public companies. The combination of two independent public companies is a complex, costly and time-consuming process.

The success of SLB’s acquisition of ChampionX will depend in large part on the success of the management of the Combined Company in integrating the operations, strategies, technologies and personnel of the two companies following the completion of the Merger, without adversely affecting current revenues and investments in future growth.

Achieving these goals requires, among other things, realization of the targeted cost and commercial synergies expected from the Merger. If the Combined Company is not able to achieve these objectives and realize the anticipated benefits and synergies expected from the Merger within the anticipated timing or at all, the Combined Company’s business, financial condition and results of operations may be adversely affected, SLB’s earnings per share after completion of the Merger may be diluted, the accretive effect of the Merger may decrease or be delayed, and the share price of SLB common stock may be negatively impacted.

Potential issues and difficulties the Combined Company may encounter in the integration process include the following:

 

   

the inability to successfully integrate the respective businesses of ChampionX and SLB in a manner that permits the Combined Company to achieve the cost savings and operating synergies anticipated to result from the Merger, which could result in the anticipated benefits of the Merger not being realized partly or wholly in the time frame currently anticipated or at all;

 

   

lost sales and customers as a result of certain customers of either or both of the two companies deciding not to do business with the Combined Company, or deciding to decrease their amount of business in order to reduce their reliance on a single company;

 

   

integrating personnel from the two companies while maintaining focus on providing consistent, high-quality products and customer service;

 

   

potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Merger; and

 

   

performance shortfalls at one or both of the two companies as a result of the diversion of management’s attention caused by completing the Merger and integrating the companies’ operations.

In addition, even if the businesses of ChampionX and SLB are integrated successfully, the full benefits of the Transactions, including the synergies, cost savings, or sales or growth opportunities that are expected, may not be

 

30


Table of Contents

realized within the anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of the businesses of ChampionX and SLB. All of these factors could decrease or delay the expected accretive effect of the Merger and negatively impact the Combined Company’s results of operations.

Business issues currently faced by one company may be imputed to the operations of the other company.

To the extent that either SLB or ChampionX currently has or is perceived by customers to have operational challenges, such as on-time performance, safety issues or workforce issues, those challenges may raise concerns by existing customers of the other company following the Merger which may limit or impede the Combined Company’s future ability to obtain additional work from those customers.

Each of ChampionX and SLB may have liabilities that are not known to the other party.

Each of ChampionX and SLB may have liabilities that the other party failed, or was unable, to discover in the course of performing its respective due diligence investigations. ChampionX and SLB may learn additional information about the other party that materially adversely affects it, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. As a result of these factors, the Combined Company may incur additional costs and expenses and may be forced to later write-down or write-off assets, restructure operations or incur impairment or other charges that could result in the Combined Company reporting losses. Even if ChampionX’s and SLB’s due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with its preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on the Combined Company’s financial condition and results of operations and could contribute to negative market perceptions about the SLB common stock.

The Combined Company may not be able to retain customers or suppliers, and customers or suppliers may seek to modify contractual obligations with the Combined Company.

As a result of the Merger, the Combined Company may experience adverse effects on relationships with customers and suppliers that may harm the Combined Company’s business and results of operations. Certain customers or suppliers may seek to terminate or modify contractual obligations following the Merger whether or not contractual rights are triggered as a result of the Merger. There can be no guarantee that customers and suppliers will remain with or continue to have a relationship with the Combined Company or do so on the same or similar contractual terms following the Merger. If any customers or suppliers seek to terminate or modify contractual obligations or discontinue their relationships with the Combined Company, then the Combined Company’s business and results of operations may be harmed.

Failure to retain key employees and skilled workers could adversely affect the Combined Company following the Merger.

The Combined Company’s performance following the Merger could be adversely affected if it is unable to retain certain key employees and skilled workers of ChampionX. It is possible that these employees may decide not to remain with ChampionX while the Merger is pending or with the Combined Company after the Merger is completed. The loss of the services of one or more of these key employees and skilled workers could adversely affect the future operating results of the Combined Company because of their experience and knowledge of ChampionX’s business. In addition, current and prospective employees of ChampionX may experience uncertainty about their future roles with ChampionX until after the Merger is completed. This may adversely affect the ability of ChampionX to attract and retain key personnel, which could adversely affect the Combined Company’s performance following the Merger, and could diminish the anticipated benefits of the Merger. No assurance can be given that the Combined Company, following the Merger, will be able to retain or attract key management personnel and other key employees of ChampionX and SLB to the same extent that ChampionX and SLB have previously been able to retain or attract their own employees.

 

31


Table of Contents

SLB and ChampionX must obtain certain regulatory approvals and clearances to consummate the Merger, which, if delayed, not granted or granted with unacceptable conditions, could prevent, substantially delay or impair consummation of the Merger, result in additional expenditures of money and resources or reduce the anticipated benefits of the Merger.

The Merger is subject to review by antitrust regulators in the United States under the HSR Act. Under the HSR Act, SLB and ChampionX are required to make premerger notification filings and to await the expiration or early termination of the statutory waiting period (and any extension of the waiting period) prior to completing the Merger. On April 23, 2024, SLB and ChampionX each filed a Premerger Notification and Report Form under the HSR Act. The Merger is also subject to antitrust review by government authorities in several non-U.S. jurisdictions, including Australia, Brazil, Canada, Mexico, New Zealand, Norway, Saudi Arabia and the United Kingdom. The parties have made or may make additional antitrust filings in certain other jurisdictions outside the United States. The completion of the Merger is subject to the receipt of clearance by antitrust authorities in the United States and in specified non-U.S. jurisdictions. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying or impeding consummation of the Merger or of imposing additional costs or limitations on the Combined Company following completion of the Merger, any of which might have an adverse effect on the Combined Company following completion of the Merger and may diminish the anticipated benefits of the Merger. For additional information about the regulatory approvals process see “The Merger Agreement—Certain Additional Agreements—Regulatory Approvals.”

Risks to SLB Common Stock Following the Merger

The trading price and volume of SLB common stock may be volatile following completion of the Merger.

The trading price and volume of SLB common stock may be volatile following completion of the Merger. The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of SLB common stock. As a result, SLB shareholders and ChampionX stockholders who receive SLB common stock upon completion of the Merger may suffer a loss on their investment. Many factors may impair the market for SLB common stock and the ability of investors to sell shares at an attractive price and could also cause the market price and demand for SLB common stock to fluctuate substantially, which may negatively affect the price and liquidity of SLB common stock. The market for SLB common stock will depend on a number of factors and conditions, many of which are beyond the control of the Combined Company or its stockholders.

The market value of SLB common stock could decline if large amounts of SLB common stock are sold following the Merger.

Following the Merger, SLB shareholders and former ChampionX stockholders will own interests in the Combined Company operating an expanded business with more assets and a different mix of liabilities. Current stockholders of SLB and ChampionX may not wish to continue to invest in the Combined Company, or may wish to reduce their investment in the Combined Company, in order to comply with institutional investing guidelines, to increase diversification or to track any rebalancing of stock indices in which SLB common stock or CHX common stock is currently included. If, following the Merger, large amounts of SLB common stock are sold, or if a perception in the market manifests that such dispositions could occur, the price of SLB common stock could decline.

The Merger may not be accretive, and may be dilutive, to SLB’s earnings per share in the near term, which may negatively affect the market price of SLB common stock.

While SLB anticipates that the Merger will be accretive to its earnings per share in 2026, this expectation is based on preliminary estimates that may materially change, and the Merger may be dilutive to earnings per share in the near term. In addition, future events and conditions could decrease or delay any accretion, result in dilution or cause greater dilution than is currently expected, including:

 

32


Table of Contents
   

adverse changes in energy market conditions;

 

   

commodity prices for oil, natural gas and natural gas liquids;

 

   

operating results;

 

   

competitive conditions;

 

   

laws and regulations affecting the energy business;

 

   

capital expenditure obligations; and

 

   

general economic conditions.

Any dilution of, or decrease or delay of any accretion to, SLB’s earnings per share could cause the price of SLB common stock to decline.

The shares of SLB common stock to be received by ChampionX stockholders upon the completion of the Merger will have different rights from shares of ChampionX common stock.

Upon completion of the Merger, ChampionX stockholders will no longer be stockholders of ChampionX, a Delaware corporation, but will instead become stockholders of SLB, a company organized under the laws of Curaçao, and their rights as stockholders will be governed by Curaçao law and SLB’s articles of incorporation and by-laws. Curaçao law and the terms of SLB’s articles of incorporation and by-laws may be materially different than Delaware law and the terms of ChampionX’s second amended and restated certificate of incorporation and amended and restated by-laws, which currently govern the rights of ChampionX stockholders. Please see “Comparison of Shareholder Rights” for a discussion of the different rights associated with SLB common stock.

Tax Risks Related to the Merger

ChampionX stockholders will receive no cash consideration, other than cash in lieu of fractional shares of SLB common stock, with which to pay any potential tax liability resulting from the Merger.

Although ChampionX stockholders will receive no cash consideration in the Merger other than any cash received in lieu of fractional shares of SLB common stock, the receipt of SLB common stock and any cash in lieu of fractional shares of SLB common stock by ChampionX stockholders in exchange for ChampionX common stock in the Merger will be treated as a taxable transaction for U.S. federal income tax purposes. The amount of income, gain or loss recognized by each ChampionX stockholder in the Merger will vary depending on each ChampionX stockholder’s particular situation, including the fair market value of the SLB common stock, the amount of any cash in lieu of fractional shares of SLB common stock received by such stockholder in the Merger, and the adjusted tax basis of the ChampionX common stock exchanged by such stockholder in the Merger. Please refer to the section entitled “The Merger—Material U.S. Federal Income Tax Consequences” of this proxy statement/prospectus for a description of the material U.S. federal income tax consequences of the Merger.

Other Risks Relating to ChampionX and SLB

SLB and ChampionX are, and following completion of the Merger, the Combined Company will continue to be, subject to the risks described above. In addition, SLB is, and will continue to be, subject to the risks described in Part I, Item 1A in SLB’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on January 24, 2024, and in Part II, Item 1A of SLB’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on April 24, 2024, and ChampionX is, and will continue to be, subject to the risks described in Part I, Item 1A in ChampionX’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 6, 2024, and in Part II, Item 1A of ChampionX’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on April 25, 2024, each of which is incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” for a description of the information incorporated by reference in this proxy statement/prospectus.

 

33


Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus and the documents incorporated by reference herein include “forward-looking statements” about SLB, ChampionX and the Combined Company within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995. The opinions, forecasts, projections, expected timetable for completing the Transactions, benefits and synergies of the Transactions, future opportunities for the Combined Company, future financial performance, and any other statements regarding SLB’s and ChampionX’s future expectations, beliefs, plans, objectives, financial conditions, or assumptions, or future events or performance that are not statements of historical fact, are forward-looking statements. Similarly, statements that describe future plans, objectives or goals or future revenues or other financial metrics are also forward-looking statements. Although SLB and ChampionX believe that the expectations reflected in such forward-looking statements are reasonable, they can give no assurances that such expectations will prove to have been correct. These statements are subject to, among other things, satisfaction of the closing conditions to the Merger, the risk that the contemplated Merger does not occur, negative effects from the pendency of the Merger, the ability to successfully integrate SLB’s and ChampionX’s respective businesses and to realize expected synergies, the risk that ChampionX and the Combined Company will not be able to retain key employees, expenses of the Merger, the timing to consummate the Transactions and other risk factors.

Except for their respective obligations to disclose material information under U.S. federal securities laws, neither SLB nor ChampionX undertakes any obligation to release publicly any revisions to any forward-looking statements, to report events or circumstances after the date of this document, or to report the occurrence of unanticipated events.

Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “would,” “should,” “plans,” “likely,” “expects,” “anticipates,” “intends,” “believes,” “estimates,” “thinks,” “may,” “projects,” “predicts,” “anticipates,” “creates,” “could,” “will,” “guidance,” “looks,” “goals,” “potential,” “future,” “builds,” “focus,” “continues,” “strives” or the negative of such terms or other variations thereof and similar expressions, are forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The following important factors, in addition to those discussed under the section entitled “Risk Factors” and elsewhere in this proxy statement/prospectus and the documents incorporated by reference herein, could affect the future results of the oil and gas industry in general, and the Combined Company after the Merger in particular, and could cause those results to differ materially from those expressed in or implied by such forward-looking statements:

 

   

changing global economic, geopolitical, or industry conditions;

 

   

changes in exploration and production spending by the companies’ customers and changes in the level of oil and natural gas exploration and development;

 

   

the ongoing conflict in Ukraine;

 

   

inflation;

 

   

changing monetary policy by governments;

 

   

pricing pressure;

 

   

weather and seasonal factors;

 

   

unfavorable effects of health pandemics;

 

   

challenges in SLB’s or ChampionX’s supply chains;

 

   

operational modifications, delays, or cancellations;

 

   

production declines;

 

34


Table of Contents
   

changes in government regulations or enforcement practices, including with respect to environmental, health and safety matters;

 

   

the inability of technology to meet new challenges in exploration;

 

   

overall demand for, and pricing of, the companies’ products and services;

 

   

competition in the natural gas and oil exploration and production industry;

 

   

negative public perceptions of SLB’s and/or ChampionX’s industry;

 

   

warranty and product liability claims;

 

   

the impact of acquisitions the companies have made or may make;

 

   

changes in the price of (and demand for) oil and gas in both U.S. and international markets;

 

   

raw material costs and availability;

 

   

fluctuations in currency markets worldwide;

 

   

developments in and losses resulting from claims and litigation;

 

   

SLB’s ability to integrate the operations of ChampionX;

 

   

the amount and timing of any cost savings synergies or other efficiencies expected to result from the Merger;

 

   

inability of ChampionX, SLB, or the Combined Company to retain certain key employees and skilled workers and maintain relationships with their suppliers and customers;

 

   

future and pro forma financial condition or results of operations and future revenues and expenses;

 

   

the ability to complete the Merger on the anticipated terms and timetable;

 

   

the incurrence of significant transaction and other costs in connection with the Merger;

 

   

regulatory conditions which may be imposed as a condition to approval of the Merger;

 

   

the possibility that ChampionX stockholders may not approve the Merger;

 

   

any litigation relating to the Merger;

 

   

other risks described under the section entitled “Risk Factors” in SLB’s and ChampionX’s Annual Reports on Form 10-K for the year ended December 31, 2023 and subsequent filings made with the SEC; and

 

   

the various risks and other factors considered by the respective boards of SLB and ChampionX as described under the sections entitled “The Merger—ChampionX’s Reasons for the Merger; Recommendation of the ChampionX Board of Directors” and “The Merger—SLB’s Reasons for the Merger.”

The foregoing list of factors should not be construed to be exhaustive. Many factors mentioned in this proxy statement/prospectus, including the risks outlined under the caption “Risk Factors” contained in the Exchange Act reports of SLB and ChampionX, incorporated herein by reference, will be important in determining future results, and actual future results may vary materially.

All subsequent written and oral forward-looking statements attributable to SLB or ChampionX or to persons acting on their behalf are expressly qualified in their entirety by reference to these risks and uncertainties. There is no assurance that the actions, events or results of the forward-looking statements will occur, or, if any of them do, when they will occur or what effect they will have on the business, results of operations, financial condition or cash flows of SLB or ChampionX or the Combined Company. In light of these uncertainties, you should not

 

35


Table of Contents

place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and neither SLB nor ChampionX undertakes any obligation to publicly update or revise any forward-looking statements except as required by law.

For additional information with respect to these factors, see the section entitled “Where You Can Find More Information.”

 

36


Table of Contents

THE COMPANIES

ChampionX Corporation

ChampionX is a global leader in chemistry solutions, artificial lift systems and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently and sustainably around the world. ChampionX’s expertise, innovative products, and digital technologies products provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. ChampionX has a presence in more than 60 countries with more than 7,300 employees.

ChampionX operates its business in four segments: Production Chemical Technologies, Production & Automation Technologies, Drilling Technologies and Reservoir Chemical Technologies. Production Chemical Technologies offers products and services that cover a broad range of onshore, offshore, and oil sands chemical solutions in production and midstream operations that are built upon ChampionX’s foundation of deep expertise and capabilities in chemical applications across the oil and natural gas value chain. Production & Automation Technologies offers products, technologies, and services that facilitate the safe, efficient, and cost-effective extraction of oil and gas through artificial lift and digital automation applications. Drilling Technologies offers innovative, industry leading polycrystalline diamond cutter inserts, bearings, valves, nozzles and mining tools to help customers drill the world’s most demanding oil exploration and development projects and for use in other industries. Reservoir Chemical Technologies offers chemistry-oriented solutions and technologies to help customers meet their performance, efficiency, sustainability, and financial objectives for well drilling, cementing, fracturing, acidizing, and other well interventions.

The principal United States market for ChampionX common stock is Nasdaq, where it is traded under the symbol “CHX.”

ChampionX’s rich history is built on over a century of experience, dating back to the 1800s and the petroleum industry’s infancy. ChampionX is incorporated under the laws of Delaware, with its corporate headquarters located at 2445 Technology Forest Blvd., Building 4, Suite 1200, The Woodlands, TX 77381, and its phone number is (281) 403-5772.

Schlumberger Limited (Schlumberger N.V.)

SLB is a global technology company focused on driving energy innovation for a balanced planet. With a global presence in more than 100 countries and employees representing almost twice as many nationalities, SLB works each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition.

With a workforce of approximately 111,000 people, SLB is organized under four Divisions: Digital & Integration, Reservoir Performance, Well Construction and Production Systems. SLB’s four Divisions operate through a geographical structure of four Basins that are aligned with critical concentrations of activity: Americas Land, Offshore Atlantic, Middle East & North Africa, and Asia. The Basins are configured around common regional characteristics that enable SLB to deploy fit-for-purpose technologies, operating models, and skills to meet the specific customer needs in each Basin. The Basins are further organized into GeoUnits, which can be a region, a single country, or made up of several countries. With a strong focus on customers, the Basins identify opportunities for growth, and are focused on agility, responsiveness, and competitiveness.

The principal U.S. market for SLB common stock is the NYSE, where it is traded under the symbol “SLB.” SLB common stock is also listed for trading on the Euronext Paris.

SLB was founded in 1926 and is incorporated under the laws of Curaçao, with executive offices in Paris, Houston, London and The Hague. SLB’s executive offices in the United States are at 5599 San Felipe, Houston, Texas 77056, and its telephone number is (713) 513-2000.

 

37


Table of Contents

Sodium Holdco, Inc.

Sodium Holdco, Inc., which we refer to as Holdco, is a Delaware corporation and an indirect wholly owned subsidiary of SLB. Holdco has not carried on any activities to date, other than activities incidental to its formation or undertaken in connection with the Transactions.

Sodium Merger Sub, Inc.

Sodium Merger Sub, Inc., which we refer to as Merger Sub, is a Delaware corporation and a direct wholly owned subsidiary of Sodium Holdco, Inc. Merger Sub has not carried on any activities to date, other than activities incidental to its formation or undertaken in connection with the Transactions.

 

38


Table of Contents

THE CHAMPIONX SPECIAL MEETING

This section contains information about the ChampionX Special Meeting at which ChampionX stockholders will be asked to consider and vote on proposals to (i) adopt the Merger Agreement, (ii) approve, by a non-binding, advisory vote, the compensation that may become payable to ChampionX’s named executive officers in connection with the Merger and (iii) approve the adjournment of the ChampionX Special Meeting, if necessary, (1) to solicit additional proxies in favor of the Merger Proposal if (a) there are holders of an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum at such meeting or (b) there are insufficient votes at the time of such adjournment to approve the Merger Proposal or (2) to allow reasonable additional time for the filing and mailing of any required supplement or amendment to this proxy statement/prospectus, and the review of such materials by ChampionX stockholders.

ChampionX is furnishing this proxy statement/prospectus to its stockholders in connection with the solicitation of proxies to be voted at the ChampionX Special Meeting. ChampionX stockholders are encouraged to read the entire document carefully, including the annexes to this document, for more detailed information regarding the Merger Agreement and the Transactions.

Date, Time and Place

The ChampionX Special Meeting will be held via a live webcast at https://meetnow.global/M6YL2F7, on June 18, 2024 at 9:00 a.m. Central Time (unless it is adjourned or postponed to a later date).

The ChampionX Special Meeting can be accessed by visiting https://meetnow.global/M6YL2F7, where ChampionX stockholders will be able to participate and vote online during the ChampionX Special Meeting. ChampionX encourages its stockholders to access the meeting early—approximately 15 minutes before the start of the meeting. Please follow the instructions as outlined in this proxy statement/prospectus.

Participating in the Special Meeting

Holders of record of ChampionX at the close of business on May 14, 2024 are entitled to attend and vote on the matters presented at the ChampionX Special Meeting.

To be admitted to the ChampionX Special Meeting, ChampionX stockholders must enter the 15-digit control number found on their proxy card. ChampionX stockholders whose stock is held in a stock brokerage account or by a bank or other nominee must register in advance to attend the ChampionX Special Meeting. To register, each such ChampionX stockholder must request proof of their proxy power reflecting their ChampionX holdings from their broker or other nominee and submit it along with their name and email address to Computershare, ChampionX’s transfer agent. Requests for registration must be labeled “Legal Proxy” and be received no later than June 13, 2024 by 5:00 p.m. Eastern Time. Such ChampionX stockholders will receive confirmation of their registration by email after Computershare receives their registration materials. Registration materials and information should be sent: by email to legalproxy@computershare.com, or by mail to Computershare, ChampionX Legal Proxy, P.O. Box 43001, Providence, RI 02940-300. Once properly admitted to the ChampionX Special Meeting, ChampionX stockholders may vote their shares by following the instructions available on the meeting website during the meeting. If you experience technical difficulties, you may contact the technical support number at 1-888-724-2416 (inside the United States and Canada) or 1-781-575-2748 (all other locations).

Questions regarding matters presented at the ChampionX Special Meeting may be submitted during the meeting through the meeting’s website. Additional information regarding rules and procedures for participating in the virtual meeting will be provided in the meeting rules of conduct, which you will be able to view during the meeting on the meeting website.

 

39


Table of Contents

Purpose of the Special Meeting

At the ChampionX Special Meeting, ChampionX stockholders will be asked to consider and vote on:

 

   

Proposal 1: The Merger Proposal: To adopt the Merger Agreement, pursuant to which (i) Merger Sub will merge with and into ChampionX in the Merger, with ChampionX surviving the Merger as the Surviving Corporation an indirect wholly owned subsidiary of SLB and (ii) at the Effective Time, ChampionX’s certificate of incorporation will be amended and restated in its entirety in the form set forth on Exhibit A to the Merger Agreement, which will be the certificate of incorporation of ChampionX until thereafter amended in accordance with its terms and applicable law;

 

 

   

Proposal 2: The Compensation Proposal: To approve, by a non-binding, advisory vote, the compensation that may become payable to ChampionX’s named executive officers in connection with the Merger; and

 

   

Proposal 3: The Adjournment Proposal: To approve the adjournment of the ChampionX Special Meeting, if necessary, (1) to solicit additional proxies in favor of the Merger Proposal if (a) there are holders of an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum at such meeting or (b) there are insufficient votes at the time of such adjournment to approve the Merger Proposal or (2) to allow reasonable additional time for the filing and mailing of any required supplement or amendment to this proxy statement/prospectus, and the review of such materials by ChampionX stockholders.

ChampionX’s stockholders must approve the Merger Proposal in order for the Merger to be consummated. If ChampionX’s stockholders fail to approve the Merger Proposal, the Merger will not be consummated. The votes on the Compensation Proposal and Adjournment Proposal are separate and apart from the vote on the Merger Proposal. Accordingly, a ChampionX stockholder may vote in favor of the Compensation Proposal and/or the Adjournment Proposal and vote not to approve the Merger Proposal.

Recommendation of the ChampionX Board of Directors

After careful consideration, the ChampionX Board has unanimously (i) determined the Merger Agreement and the consummation of the Merger and the Transactions, to be fair to and in the best interests of ChampionX and its stockholders, (ii) declared the Merger Agreement and the consummation of the Transactions, including the Merger, to be advisable, (iii) authorized and approved the Merger Agreement, including the execution, delivery and performance thereof, (iv) directed that the Merger Agreement be submitted to the ChampionX stockholders for their consideration and adoption and (v) recommended the ChampionX stockholders adopt the Merger Agreement.

ACCORDINGLY, THE CHAMPIONX BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE MERGER PROPOSAL, A VOTE “FOR” THE COMPENSATION PROPOSAL AND A VOTE “FOR” THE ADJOURNMENT PROPOSAL.

ChampionX stockholders should carefully read this document in its entirety for more detailed information concerning the Merger Agreement and the Transactions, including the Merger. In particular, ChampionX stockholders are directed to the Merger Agreement, which is attached hereto as Annex A.

Record Date; Stockholders Entitled to Vote

The record date for determining the ChampionX stockholders entitled to receive notice of, and to vote at, the ChampionX Special Meeting or at any adjournment or postponement thereof, is the close of business on May 14, 2024.

As of the record date, there were 190,579,933 shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting. Each such holder will be entitled to one vote for each share of ChampionX common stock that it owned on the record date.

 

40


Table of Contents

Quorum

A “quorum” for purposes of the ChampionX Special Meeting consists of the holders of a majority of issued and outstanding shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting. There must be a quorum for the ChampionX Special Meeting to be held. In the absence of a quorum at the ChampionX Special Meeting, the chair of the meeting, or the affirmative vote of holders of at least a majority of the outstanding shares of ChampionX common stock, present online or represented by proxy and entitled to vote, at the ChampionX Special Meeting, though less than a quorum, may adjourn the ChampionX Special Meeting to a later date and time (subject to applicable law and compliance with the terms of the current amended and restated by-laws of ChampionX).

If you submit a timely, properly executed proxy or voting instruction form, then you will be considered part of the quorum so long as your shares are voted on at least one item of business, other than a procedural motion. Abstentions will be counted for purposes of determining whether there is a quorum at the ChampionX Special Meeting. A broker non-vote occurs when a beneficial owner does not provide voting instruction to their broker or custodian with respect to a proposal on which such broker or custodian does not have discretionary authority to vote. If you are a “street name” holder of shares of ChampionX common stock and you do not provide your bank, broker, trust or other nominee with voting instructions, then your shares will not be counted in determining the presence of a quorum. The ChampionX Special Meeting will be adjourned or postponed, if necessary, (1) to solicit additional proxies in favor of the Merger Proposal if (a) there are holders of an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum at such meeting or (b) there are insufficient votes at the time of such adjournment to approve the Merger Proposal or (2) to allow reasonable additional time for the filing and mailing of any required supplement or amendment to this proxy statement/prospectus, and the review of such materials by ChampionX stockholders.

Vote Required for Approval

Merger Proposal. The approval of the Merger Proposal requires, assuming a quorum is present, the affirmative vote of the holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting. Abstentions, a broker non-vote or a failure to vote will have the same effect as a vote “AGAINST” the Merger Proposal.

Compensation Proposal. The approval of the Compensation Proposal requires, assuming a quorum is present, affirmative vote of the holders of a majority of the voting power of ChampionX present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting. Although the ChampionX Board intends to consider the vote resulting from this proposal, the vote is advisory only and, therefore, is not binding on ChampionX or any of its subsidiaries, and, if the Merger Agreement is approved by ChampionX stockholders and the Merger is consummated, the compensation that is based on or otherwise relates to the Merger will be payable to ChampionX’s named executive officers (to the extent that ChampionX is contractually obligated to pay the compensation) even if the Compensation Proposal is not approved. Abstentions will have the same effect as a vote “AGAINST” the Compensation Proposal. Broker non-votes and failure of any ChampionX stockholder to submit a vote (e.g., by not submitting a proxy or not voting online) will have no effect on approval of the Compensation Proposal.

Adjournment Proposal. Approval of the Adjournment Proposal requires, whether or not a quorum is present, the affirmative vote of the holders of a majority of the voting power of ChampionX present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal. Broker non-votes and failure of any ChampionX stockholders to submit a vote (e.g., by not submitting a proxy or not voting online) will have no effect on approval of the Adjournment Proposal.

Failure to Vote; Abstentions; Broker Non-Votes

A failure of any ChampionX stockholder to submit a vote (e.g., by not submitting a proxy or not voting online) occurs when a ChampionX stockholder is not present online or represented by proxy and entitled to vote at the ChampionX Special Meeting.

 

41


Table of Contents

An abstention occurs when a ChampionX stockholder is present for purposes of a quorum by virtually attending the ChampionX Special Meeting and either does not vote or submits a ballot marked “abstain.” An abstention also occurs when a ChampionX stockholder does not attend the ChampionX Special Meeting and instead submits a proxy with an “abstain” instruction. Abstentions will be counted for purposes of determining whether there is a quorum at the ChampionX Special Meeting.

Under the applicable rules that govern brokers who have record ownership of shares of ChampionX common stock that they hold in “street name” for their clients who are the beneficial owners of the ChampionX common stock, brokers have the discretion to vote such ChampionX common stock on routine matters, but not on non-routine matters, including the Merger Proposal, the Compensation Proposal and the Adjournment Proposal, absent direction from the ChampionX stockholder. Broker non-votes occur when shares of ChampionX common stock held by a broker are not voted with respect to a proposal because (i) the broker has not received voting instructions from the beneficial owner, and (ii) the broker lacks the authority to vote the ChampionX shares of common stock at his or her discretion. Because it is expected that all of the matters to be voted on at the ChampionX Special Meeting will be non-routine under applicable stock exchange rules, brokers and custodians will not have discretionary authority to vote on any such proposal; therefore, if you do not provide voting instructions to your broker or custodian, your ChampionX common stock will not count towards determining whether a quorum is present and your ChampionX common stock will not be voted on any of the proposals.

Because approval of the Merger Proposal requires, assuming a quorum is present, the affirmative vote of the holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting, the failure of any ChampionX stockholder to submit a vote (e.g., by not submitting a proxy or not voting online), any abstention by a ChampionX stockholder and a broker non-vote will have the same effect as a vote “AGAINST” approval of the Merger Proposal.

Because approval of the Compensation Proposal requires, assuming a quorum is present, the affirmative vote of the holders of a majority of the voting power of ChampionX present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting, abstentions are counted as shares present and entitled to vote and will have the same effect as votes “AGAINST” the Compensation Proposal. A failure of any ChampionX stockholder to submit a vote (e.g., by not submitting a proxy or not voting online) and a broker non-vote will have no effect on the approval of the Compensation Proposal.

Because approval of the Adjournment Proposal requires, whether or not a quorum is present, the affirmative vote of the holders of a majority of the voting power of ChampionX present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting, abstentions are counted as shares present and entitled to vote and will have the same effect as votes “AGAINST” the Adjournment Proposal. A failure of any ChampionX stockholder to submit a vote (e.g., by not submitting a proxy or not voting online) and a broker non-vote will have no effect on the approval of the Adjournment Proposal.

How to Vote

ChampionX stockholders of record may submit their proxies:

 

   

by telephone (within the United States, U.S. territories and Canada) using the toll-free telephone number listed on the enclosed proxy card;

 

   

through the Internet by logging onto the website indicated on the enclosed proxy card and following the prompts using the Control Number located on the proxy card; or

 

   

by mail, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

ChampionX stockholders whose shares are held in “street name” must provide their broker, nominee, fiduciary or other custodian with instructions on how to vote their shares; otherwise, their broker, nominee, fiduciary or other

 

42


Table of Contents

custodian will not vote their shares on any of the proposals before the ChampionX Special Meeting. ChampionX stockholders should check the voting form provided by their broker, nominee, fiduciary or other custodian for instructions on how to vote their shares.

YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATE(S) WITH YOUR PROXY CARD.

Revocation of Proxies

You may revoke your proxy at any time prior to a vote at the ChampionX Special Meeting by:

 

   

notifying ChampionX’s Corporate Secretary in writing at the address indicated on the cover page of this proxy statement/prospectus prior to the ChampionX Special Meeting that you have revoked your proxy;

 

   

signing and returning a new, valid proxy card with a later date (by mail, telephone or Internet); or

 

   

attending the virtual ChampionX Special Meeting and voting electronically, which will revoke any proxy previously given. Your attendance at the ChampionX Special Meeting will not by itself revoke your proxy.

Please note that if your shares are held in the name of a broker, bank, trust company or other nominee, you may change your voting instructions by submitting new voting instructions to your broker, bank, trust company or other nominee in accordance with its established procedures. If your shares are held in the name of a broker, bank, trust company or other nominee and you decide to change your vote by attending the ChampionX Special Meeting and voting in person, your vote in person at the ChampionX Special Meeting will not be effective unless you have obtained and present a “legal proxy” executed in your favor from the record holder (your broker, bank, trust company or other nominee).

Adjournments and Postponements

Any adjournment of the ChampionX Special Meeting, if necessary, (1) to solicit additional proxies in favor of the Merger Proposal if (a) there are holders of an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum at such meeting or (b) there are insufficient votes at the time of such adjournment to approve the Merger Proposal or (2) to allow reasonable additional time for the filing and mailing of any required supplement or amendment to this proxy statement/prospectus, and the review of such materials by ChampionX stockholders, requires the affirmative vote of the holders of a majority of the voting power of ChampionX common stock present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting, whether or not a quorum is present. No notice of the adjourned ChampionX Special Meeting will be given so long as the time and place, and the means of remote communication, if any, by which ChampionX stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are (1) announced at the ChampionX Special Meeting at which the adjournment is taken, (2) displayed, during the time scheduled for the ChampionX Special Meeting, on the same electronic network used to enable ChampionX stockholders and proxy holders to participate in the meeting by means of remote communication or (3) set forth in the notice of the ChampionX Special Meeting. At any such adjourned ChampionX Special Meeting which a quorum is present, ChampionX may transact any business which might have been transacted at the original ChampionX Special Meeting. If the adjournment is for more than 30 days or a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each ChampionX stockholder of record entitled to vote at such meeting.

In addition, at any time prior to convening the ChampionX Special Meeting, the ChampionX Special Meeting may be postponed without the approval of ChampionX stockholders. If postponed, ChampionX will publicly announce the new meeting date. Similar to adjournments, any postponement of the ChampionX Special Meeting for the purpose of soliciting additional proxies will allow ChampionX stockholders who have already sent in their proxies to revoke them at any time prior to their use.

 

43


Table of Contents

Solicitation of Proxies

ChampionX is soliciting the enclosed proxy card on behalf of the ChampionX Board. In addition to solicitation by mail, ChampionX and its directors, officers and employees may solicit proxies in person, by telephone or by electronic means. These persons will not be specifically compensated for doing this.

ChampionX has retained D.F. King to assist in the solicitation process. ChampionX will pay D.F. King a fee of approximately $15,000, plus an additional fixed fee for each ChampionX stockholder contacted, and will reimburse D.F. King for reasonable out-of-pocket expenses.

ChampionX will ask banks, brokers, trusts and other nominees to forward ChampionX’s proxy solicitation materials to the beneficial owners of shares of ChampionX common stock held of record by such banks, brokers, trusts or other nominees. ChampionX will reimburse these banks, brokers, trusts or other nominees for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.

Questions and Additional Information

If you have any questions about how to vote or direct a vote in respect of your shares of ChampionX common stock, you may contact ChampionX’s proxy solicitor, D.F. King, toll-free from the U.S. or Canada at (866) 416-0577, or dial direct from other locations at +1 (212) 269-5550.

 

44


Table of Contents

PROPOSAL 1: THE MERGER PROPOSAL

The Merger Proposal

ChampionX is requesting that ChampionX stockholders adopt the Merger Agreement. For a detailed discussion of the terms of the Merger Agreement and the Transactions, including the Merger, see the section entitled “The Merger Agreement.” As discussed in the section entitled “The Merger—ChampionX’s Reasons for the Merger; Recommendation of the ChampionX Board of Directors,” after careful consideration, the ChampionX Board unanimously (i) determined the Merger Agreement and the consummation of the Merger and the Transactions, to be fair to and in the best interests of ChampionX and its stockholders, (ii) declared the Merger Agreement and the consummation of the Transactions, including the Merger, to be advisable, (iii) authorized and approved the Merger Agreement, including the execution, delivery and performance thereof, (iv) directed that the Merger Agreement be submitted to the ChampionX stockholders for their consideration and adoption and (v) recommended the ChampionX stockholders adopt the Merger Agreement.

Approval of the Merger Proposal is a condition to the completion of the Merger. If the Merger Proposal is not approved, the Merger will not be consummated. For a detailed discussion of the terms and conditions of the Merger, see the section entitled “The Merger Agreement—Conditions to the Merger.”

Vote Required for Approval

Approval of the Merger Proposal requires, assuming a quorum is present, the affirmative vote of the holders of a majority of the outstanding shares of ChampionX common stock entitled to vote at the ChampionX Special Meeting. Abstentions, a broker non-vote or a failure to vote will have the same effect as a vote “AGAINST” the Merger Proposal.

Recommendation of the ChampionX Board

THE CHAMPIONX BOARD UNANIMOUSLY RECOMMENDS THAT THE CHAMPIONX STOCKHOLDERS VOTE “FOR” THE MERGER PROPOSAL.

 

45


Table of Contents

PROPOSAL 2: THE COMPENSATION PROPOSAL

The Compensation Proposal

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, ChampionX is requesting the ChampionX stockholders approve, by a non-binding, advisory vote, the compensation that may be received by ChampionX’s named executive officers in connection with the Merger as disclosed in the section entitled “The Merger—Interests of ChampionX’s Directors and Executive Officers in the Merger” including the footnotes, tables and associated narrative discussion.

The ChampionX Board unanimously recommends that ChampionX stockholders approve the following resolution:

“RESOLVED, that the compensation that may be paid or become payable to ChampionX’s named executive officers that is based on or otherwise relates to the Merger, as disclosed pursuant to Item 402(t) of Regulation S-K in the table in the section of the proxy statement/prospectus entitled “The Merger—Interests of ChampionX’s Directors and Executive Officers in the Merger,” including the associated footnotes, tables and narrative discussion and the agreements and plans pursuant to which such compensation may be paid or become payable, are hereby APPROVED on an advisory basis.”

Vote Required for Approval

The Compensation Proposal is a vote separate and apart from the vote to adopt the Merger Agreement, and approval of the Compensation Proposal is not a condition to the completion of the Merger. Accordingly, you may vote to approve the Compensation Proposal and vote not to adopt the Merger Agreement and vice versa. Because the vote is advisory in nature only, it will not be binding on ChampionX. Accordingly, to the extent that ChampionX is contractually obligated to pay the compensation, the compensation will be payable to the named executive officers, subject only to the conditions applicable thereto, if the Merger Agreement is adopted and the Merger consummated, regardless of the outcome of the Compensation Proposal.

Approval of the Compensation Proposal requires, assuming a quorum is present, affirmative vote of the holders of a majority of the voting power of ChampionX common stock present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting. Abstentions will have the same effect as a vote “AGAINST” the Compensation Proposal. Broker non-votes and failure of any ChampionX stockholder to submit a vote (e.g., by not submitting a proxy or not voting online) will have no effect on the Compensation Proposal.

Recommendation of the ChampionX Board

THE CHAMPIONX BOARD UNANIMOUSLY RECOMMENDS THAT THE CHAMPIONX STOCKHOLDERS VOTE, ON AN ADVISORY BASIS, “FOR” THE APPROVAL OF THE COMPENSATION PROPOSAL.

 

46


Table of Contents

PROPOSAL 3: THE ADJOURNMENT PROPOSAL

The Adjournment Proposal

ChampionX is requesting that ChampionX stockholders approve the adjournment of the ChampionX Special Meeting, if necessary, (1) to solicit additional proxies in favor of the Merger Proposal if (a) there are holders of an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum at such meeting or (b) there are insufficient votes at the time of such adjournment to approve the Merger Proposal or (2) to allow reasonable additional time for the filing and mailing of any required supplement or amendment to this proxy statement/prospectus, and the review of such materials by ChampionX stockholders.

If, at the ChampionX Special Meeting, (i) the number of shares of ChampionX common stock represented and voting in favor of the Merger Proposal is insufficient to approve such proposal, (ii) there are an insufficient number of shares of ChampionX common stock present online or represented by proxy and entitled to vote at the ChampionX Special Meeting to constitute a quorum or (iii) ChampionX determines that it is necessary to adjourn the meeting to allow reasonable additional time for the filing and mailing of any required supplement or amendment to this proxy statement/prospectus, and the review of such materials by ChampionX stockholders, ChampionX may move to adjourn the ChampionX Special Meeting in order to enable the ChampionX Board to solicit additional proxies to obtain a quorum or for approval of the Merger Proposal.

Vote Required for Approval

Approval of the Adjournment Proposal requires, whether or not a quorum is present, the affirmative vote of the holders of a majority of the voting power of ChampionX common stock present online or represented by proxy and entitled to vote on such matter at the ChampionX Special Meeting. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal. Broker non-votes and failure of any ChampionX stockholders to submit a vote (e.g., by not submitting a proxy or not voting online) will have no effect on the Adjournment Proposal.

Recommendation of the ChampionX Board

THE CHAMPIONX BOARD UNANIMOUSLY RECOMMENDS THAT THE CHAMPIONX STOCKHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.

 

47


Table of Contents

THE MERGER

Structure of the Merger

Pursuant to the Merger Agreement, at the Effective Time, Merger Sub will merge with and into ChampionX, in accordance with the requirements of Delaware law, whereupon the separate existence of Merger Sub will cease and ChampionX will continue as the Surviving Corporation in the Merger as an indirect wholly owned subsidiary of SLB. Following the Merger, shares of ChampionX common stock will be delisted from Nasdaq, will be deregistered under the Exchange Act and will cease to be publicly traded.

Background of the Merger

As part of the ongoing review of ChampionX’s business, the ChampionX Board and management team regularly evaluate ChampionX’s historical performance, future growth prospects and overall strategic objectives to achieve its long-term strategic, operational and financial goals and enhance stockholder value. The topics of these conversations have included, among other things, developments in the oil and gas industry, generally, including recent M&A activity and investor focus within the industry on consistent return of capital and lower cost of capital, as well as ChampionX’s position in the industry. The ChampionX Board has, in connection with such reviews, evaluated ChampionX’s business plan and considerations associated with continuing to execute on the business plan. At the direction of the ChampionX Board, such reviews have also included periodic updates from ChampionX’s management and its advisors regarding the general landscape of mergers and acquisitions and other strategic transactions and the likelihood and risks associated with such transactions. In addition, from time-to-time Mr. Sivasankaran Somasundaram, the President and Chief Executive Officer of ChampionX, has engaged in informal conversations about potential strategic transactions involving ChampionX with senior executives of other companies in the industry. The ChampionX Board was provided with regular updates regarding these interactions during their meetings.

During August 2023, the Chief Executive Officer of Party A, a company in the oil and gas industry, and an acquaintance of Mr. Somasundaram, met with Mr. Somasundaram in Houston, Texas. During this meeting, the Chief Executive Officer of Party A indicated that Party A was preparing for an upcoming strategy review, and raised the possibility of a potential business combination transaction involving Party A and ChampionX. The Chief Executive Officer of Party A had previously raised the possibility of a potential business combination transaction involving Party A and ChampionX to Mr. Somasundaram in passing, but no transaction terms had ever been discussed. Mr. Somasundaram told the Chief Executive Officer of Party A that he would discuss with the ChampionX Board and promptly informed the ChampionX Board of the contact with Party A. The ChampionX Board expressed support for engaging in preliminary discussions with Party A in respect of a potential transaction, and ChampionX’s management and its advisors subsequently considered the potential terms of a transaction involving Party A.

On November 12, 2023, ChampionX and Party A executed a confidentiality agreement, which included customary limitations regarding the use and disclosure of ChampionX’s confidential information and customary standstill obligations applicable to Party A that terminated automatically upon the entry by ChampionX into a definitive agreement with respect to a business combination transaction with another party.

On November 15, 2023, the Chief Executive Officer of Party B, a company in the oil and gas industry, and Mr. Somasundaram met in Houston, Texas. At the meeting, the Chief Executive Officer of Party B expressed an interest in exploring a potential business combination transaction involving Party B and ChampionX and discussed with Mr. Somasundaram the strategic rationale of such transaction from Party B’s perspective. Mr. Somasundaram told the Chief Executive Officer of Party B that he would discuss with the ChampionX Board and promptly informed the ChampionX Board of the contact with Party B.

On November 29, 2023, Mr. Olivier Le Peuch, Chief Executive Officer of SLB, who had met Mr. Somasundaram at the airport in early October 2023 and with whom Mr. Somasundaram had exchanged

 

48


Table of Contents

business cards, contacted Mr. Somasundaram to request a meeting, but did not indicate the purpose of the meeting. The meeting was scheduled for December 8, 2023.

During December 2023, ChampionX and Party A held periodic discussions on preliminary principal terms in respect of a potential transaction involving ChampionX and Party A, including the fact that Party A did not think such a transaction would involve a meaningful premium for ChampionX stockholders and ChampionX’s belief that such a transaction should involve a meaningful premium for its stockholders.

On December 8, 2023, Mr. Le Peuch and Mr. Somasundaram met in Houston, Texas. During the course of their discussion, Mr. Le Peuch discussed with Mr. Somasundaram the possibility of exploring a potential transaction involving ChampionX and SLB. Mr. Le Peuch discussed with Mr. Somasundaram the strategic benefits and synergies of a potential transaction from SLB’s perspective, including SLB’s interest in increasing its presence in the production chemicals space and artificial lift business. Mr. Le Peuch also noted SLB’s appreciation of ChampionX’s success in growing its business in North America. No specific transaction terms were discussed, but Mr. Le Peuch indicated that if ChampionX were interested, SLB would work to prepare a proposal. Mr. Somasundaram indicated to Mr. Le Peuch that he would discuss potential next steps with the ChampionX Board.

Later on December 8, 2023, the ChampionX Board held a meeting by videoconference to discuss the ongoing conversations with Party A, which was attended by members of ChampionX senior management and representatives of Centerview, with whom ChampionX management and the ChampionX Board regularly consulted. At the meeting, the ChampionX Board considered the discussions with Party A, including Party A’s position that any potential transaction involving Party A and ChampionX would not involve a meaningful premium for ChampionX stockholders, as well as the ChampionX Board’s position that any such potential transaction should deliver a meaningful premium to ChampionX stockholders, and potential proposed terms for progressing discussions with Party A. During the meeting, Mr. Somasundaram also discussed with the ChampionX Board his December 8th meeting with Mr. Le Peuch. Following discussion and deliberation, the ChampionX Board indicated it would be willing to consider the terms of a proposal from SLB, as well as its continued belief that a transaction involving Party A should involve a meaningful premium to ChampionX stockholders. Following such discussion, Mr. Somasundaram indicated to Mr. Le Peuch that the ChampionX Board would be willing to consider the terms of a proposal with respect to a possible transaction involving SLB.

On December 20, 2023, Mr. Somasundaram requested a call with Mr. Le Peuch, which was held on December 21, 2023. During the call, Mr. Somasundaram asked Mr. Le Peuch whether SLB intended to submit an offer for a proposed business combination transaction involving ChampionX and, if so, on what terms. Mr. Le Peuch indicated that SLB was continuing to evaluate proposed terms for a potential transaction involving ChampionX, and no specific transaction terms were discussed during this time.

On December 31, 2023, consistent with Mr. Somasundaram’s discussions with the ChampionX Board, Mr. Somasundaram verbally proposed to Party A terms for a potential transaction involving ChampionX and Party A whereby ChampionX stockholders would receive 49.9% of the equity interests in the combined company and equityholders of Party A would retain 50.1% of the equity interests in the combined company. Shortly thereafter, the Chair of the board of directors of Party A contacted Mr. Dan Rabun, Chair of the ChampionX Board, to convey, among other things, that such terms would not be acceptable to Party A, and Party A would not proceed with a transaction involving a meaningful premium to ChampionX stockholders. Following such feedback, ChampionX and Party A ceased discussions on a potential transaction involving ChampionX and Party A.

On January 2, 2024, Mr. Le Peuch contacted Mr. Somasundaram to request the contact information of Mr. Rabun, as Mr. Jim Hackett, Chair of the SLB Board, wished to speak with him.

On January 3, 2024, Mr. Hackett contacted Mr. Rabun to affirm SLB’s interest in a potential transaction with ChampionX. Mr. Hackett indicated that SLB had heard rumors of a potential transaction involving ChampionX.

 

49


Table of Contents

Mr. Rabun noted that the ChampionX Board would be willing to consider a proposal from SLB, but any such proposal would need to deliver a meaningful premium to ChampionX stockholders in light of the business plan and prospects of ChampionX. On January 8, 2024, Mr. Hackett again contacted Mr. Rabun to indicate that the SLB Board would be meeting to discuss a potential proposal in the coming weeks. Mr. Rabun and Mr. Hackett discussed, among other things, the type of consideration to ChampionX shareholders (stock, cash or a combination of both). Mr. Rabun reiterated ChampionX’s position that any proposal would need to deliver a meaningful premium to ChampionX stockholders.

On January 18, 2024, the SLB Board held a meeting by videoconference, which was attended by members of SLB senior management. At the meeting, the SLB Board discussed and considered a potential transaction involving ChampionX, including the strategic rationale for the transaction and potential synergies. Mr. Le Peuch provided the SLB Board with a summary of his preliminary discussions with Mr. Somasundaram and advised the SLB Board that the next step would be for SLB to provide ChampionX with a non-binding letter of intent expressing SLB’s desire to acquire ChampionX in an all-stock transaction. On January 19, 2024, Mr. Le Peuch contacted Mr. Somasundaram to request a meeting, which was scheduled for January 22, 2024.

On January 22, 2024, Mr. Le Peuch met with Mr. Somasundaram in Houston, Texas to inform him that SLB was preparing to submit a proposal for SLB to acquire all of the issued and outstanding shares of ChampionX common stock in an all-stock transaction. Mr. Le Peuch did not provide Mr. Somasundaram with any indication of the valuation or offer price that would be reflected in the proposal during the meeting. Mr. Somasundaram inquired whether SLB would be proposing cash consideration to ChampionX stockholders in light of the relative size of the two companies, and indicated to Mr. Le Peuch that any proposal would need to deliver a meaningful premium to ChampionX stockholders in light of the business plan and prospects of ChampionX. Mr. Le Peuch pointed out that many transactions in the oil and gas services industry do not involve a meaningful premium, and did not discuss the form of consideration that might be included in a proposal.

On January 23 and 24, 2024, the SLB Board held a series of meetings by videoconference, which were attended by members of SLB senior management. At the meetings, the SLB Board reviewed certain materials that had been provided in advance of the meetings and prepared by members of SLB senior management and Goldman Sachs & Co. LLC (“Goldman Sachs”), financial advisor to SLB, with respect to a potential transaction involving ChampionX, including materials addressing the strategic rationale and potential synergies and a preliminary financial analysis of the proposed transaction, as well as the potential cost of the transaction. Mr. Le Peuch provided the SLB Board with a summary of his January 22 discussion with Mr. Somasundaram, including that Mr. Somasundaram had inquired as to whether SLB would consider an all-cash proposal. The SLB Board then discussed a range of potential transaction structures and related tax implications with respect to the proposed transaction. Following discussion with SLB’s management, the SLB Board determined to continue to discuss proposed terms for a transaction involving ChampionX.

On January 26, 2024, Mr. Le Peuch contacted Mr. Somasundaram to indicate that SLB was preparing to submit a proposal in respect of a potential transaction involving ChampionX, and may do so in the coming weeks.

On February 22, 2024, the SLB Board held a meeting by videoconference, which was attended by members of SLB senior management. At the meeting, the SLB Board discussed the strategic rationale for the transaction and potential synergies and a preliminary financial analysis of the proposed transaction, as well as the potential costs of the transaction. Following such discussion, the SLB Board authorized SLB management to make a non-binding proposal to acquire ChampionX in an all-stock transaction. On February 23, 2024, Mr. Le Peuch contacted Mr. Somasundaram to request a meeting, which was scheduled for February 29, 2024.

On February 29, 2024, Mr. Le Peuch met with Mr. Somasundaram in Houston, Texas and provided Mr. Somasundaram with a letter setting forth a non-binding proposal for SLB to acquire all of the issued and outstanding shares of ChampionX common stock in an all-stock transaction in which holders of ChampionX common stock would receive $36.70 for each share of ChampionX common stock (the “February 29 SLB

 

50


Table of Contents

Proposal”), payable in shares of SLB common stock. The February 29 SLB Proposal indicated, among other things, that SLB would be prepared to execute definitive documentation and announce a transaction in approximately 4 to 6 weeks, but did not include a proposed exchange ratio with respect to the contemplated stock consideration to be issued in the transaction. Promptly following receipt, Mr. Somasundaram shared the February 29 SLB Proposal with the ChampionX Board and ChampionX’s advisors.

Also on February 29, 2024, Mr. Somasundaram met with the Chief Executive Officer of Party B for a follow-up informal conversation about a potential strategic transaction involving ChampionX and Party B. During the meeting, Mr. Somasundaram conveyed that the potential transaction did not offer compelling strategic merits because the two companies did not have complementary businesses or offerings, there was no compelling strategic or market-based rationale for the potential transaction, and as a result a potential transaction involving Party B would not present an attractive opportunity to ChampionX stockholders. No further discussions were had between ChampionX and Party B.

On March 1, 2024, an update call was held with the ChampionX Board, members of ChampionX senior management and representatives of Centerview and Weil, Gotshal & Manges LLP (“Weil”), legal counsel to ChampionX, to discuss the terms of the February 29 SLB Proposal. The ChampionX Board discussed its preliminary views on the February 29 SLB Proposal and determined to discuss the proposal further at the upcoming previously scheduled ChampionX Board meeting.

On March 5, 2024, the ChampionX Board held a meeting by videoconference, which was attended by members of ChampionX senior management and representatives of Centerview and Weil. At the meeting, the ChampionX Board discussed the February 29 SLB Proposal, including the proposal that holders of ChampionX common stock would receive $36.70 for each share of Champion X common stock, payable in shares of SLB common stock, and the fact that such consideration implied an exchange ratio of 0.759 shares of SLB common stock for each share of ChampionX common stock based on the closing price of SLB common stock as of February 29, 2024. Representatives of Centerview discussed with the ChampionX Board the stock price performance of SLB and ChampionX over the prior three-year period and their stock price performance relative to one another, as well as certain preliminary financial valuation analyses in connection with the February 29 SLB Proposal. The ChampionX Board discussed and considered the valuation of ChampionX implied by the February 29 SLB Proposal, the value of the SLB common stock proposed to be issued as consideration in the potential transaction, the strategic benefits of a potential transaction, including potential synergies from the two businesses, as well as the risks associated with a potential transaction, including as compared to other potential transaction counterparties and ChampionX’s ability to continue to execute its strategic plan. The ChampionX Board also discussed with ChampionX management and its advisors the mechanics of an all-stock transaction and the potential timetable in respect of closing a potential transaction. Following discussion and deliberation, the ChampionX Board expressed their support for engaging in preliminary discussions regarding a potential all-stock transaction with SLB, subject to SLB increasing the proposed price for each share, as the ChampionX Board believed the $36.70 offer did not represent sufficient value to holders of ChampionX common stock. The ChampionX Board authorized Mr. Somasundaram to respond to SLB, requesting an increase in price to $38.50 for each share of ChampionX common stock, in order for the companies to engage in further discussions. The ChampionX Board also authorized ChampionX senior management to engage Centerview, subject to receipt of information with respect to any potential conflicts of interest that Centerview may have with respect to a potential transaction involving SLB and negotiation of acceptable fees and other terms. The ChampionX Board determined it was appropriate to retain Centerview as ChampionX’s financial advisor based upon Centerview’s reputation, qualification, experience in mergers and acquisition, financial analyses and capital markets and their familiarity with ChampionX.

On March 6, 2024, Centerview delivered to ChampionX senior management a summary of potential relationships with SLB that the ChampionX Board should consider prior to engaging Centerview to assist the ChampionX Board with respect to the potential transaction with SLB, which was subsequently shared with the ChampionX Board. The summary confirmed, among other things, that, since January 1, 2022, Centerview had not been

 

51


Table of Contents

engaged to perform financial advisory work for SLB or received any fees from SLB or any of its subsidiaries. Thereafter, Centerview and ChampionX worked to formalize the terms of Centerview’s engagement under a formal engagement letter, which was executed on April 1, 2024.

On March 7, 2024, Mr. Somasundaram contacted Mr. Le Peuch to provide him with the feedback from the ChampionX Board on the February 29 SLB Proposal. During that discussion, Mr. Somasundaram indicated to Mr. Le Peuch that the ChampionX Board would be willing to engage in further discussions if SLB would increase the offer price to $38.50 for each share of ChampionX common stock, payable in shares of SLB common stock.

Later on March 7, 2024, Mr. Le Peuch, on behalf of SLB, sent Mr. Somasundaram an updated written non-binding proposal for SLB to acquire all of the issued and outstanding shares of ChampionX common stock for $37.80 per share of Champion X common stock (the “March 7 SLB Proposal”), payable in shares of SLB common stock. The March 7 SLB Proposal also indicated, among other things, that SLB expected to be able to complete due diligence within approximately 20 business days following March 12, 2024, and proposed that the parties agree to a 30-day mutual exclusivity period and enter into a mutually acceptable confidentiality agreement. Promptly following receipt, Mr. Somasundaram shared the March 7 SLB Proposal with the ChampionX Board and ChampionX’s advisors.

Later on March 7, 2024, ChampionX senior management and representatives of Centerview updated the ChampionX Board on the March 7 SLB Proposal. After discussion regarding the March 7 SLB Proposal, including the fact that such consideration implied an exchange ratio of 0.744 shares of SLB common stock for each share of ChampionX common stock based on the closing price of SLB common stock as of March 7, 2024, the ChampionX Board considered the revised offer price and expressed their support for moving forward with preliminary discussions with SLB and entering into a confidentiality agreement with SLB in order to enable SLB, as well as ChampionX, to conduct due diligence on each other’s businesses, and to enable the parties to discuss potential transaction terms.

On March 8, 2024, Mr. Somasundaram communicated to Mr. Le Peuch that ChampionX was interested in proceeding with preliminary discussions regarding a potential transaction with SLB and in entering into a mutually acceptable confidentiality agreement, but that ChampionX would not agree to a mutual exclusivity period. Mr. Le Peuch confirmed to Mr. Somasundaram that SLB was interested in proceeding with due diligence and discussions regarding a potential transaction involving the companies. Mr. Le Peuch also indicated that SLB was willing to forego SLB’s request that the parties agree to a mutual exclusivity period, but requested via email to Mr. Somasundaram on March 8, 2023 that, for purposes of expediting diligence and ensuring that ChampionX management and its advisors were focused on the potential transaction, ChampionX not pursue any active search of alternative offers while the diligence efforts were underway. Also on March 8, 2023, Mr. Somasundaram acknowledged receipt of Mr. Le Peuch’s email and confirmed ChampionX’s agreement on the path forward.

Later on March 8, 2024, ChampionX and SLB executed a confidentiality agreement, which did not include standstill restrictions applicable to SLB. Following execution of the confidentiality agreement, each of ChampionX and SLB conducted diligence on the other party, which continued until execution of the Merger Agreement, including through various meetings covering financial, operational, legal and regulatory, accounting and tax diligence on March 13, 14, 15, 18, 19, 20, 21, 22, 25 and 26, 2024.

On March 12, 2024, Saurabh Nitin, Senior Vice President, Corporate Strategy, Development and Energy Transition of ChampionX, and Vijay Kasibhatla, Director, Mergers and Acquisitions of SLB, met in Houston, Texas to discuss SLB’s and ChampionX’s respective approaches to, and commencement of, diligence, as well as potential synergies that could be generated as a result of the potential transaction. No specific transaction terms were discussed during this meeting.

On March 13, 2024, representatives of ChampionX and SLB each held management presentations on their respective businesses, which were attended by representatives of Centerview, Goldman Sachs, and Latham &

 

52


Table of Contents

Watkins LLP (“Latham”), legal advisor to SLB. No specific transaction terms were discussed during this meeting.

On March 15, 2024, the ChampionX Board held a meeting by videoconference, which was attended by members of ChampionX senior management and representatives of Centerview and Weil. At the meeting, the ChampionX Board discussed and considered the potential transaction with SLB, including the strategic rationale for the transaction and potential synergies, and received an update from ChampionX management and Centerview on how both companies’ due diligence of the other was progressing and other transaction work streams. The ChampionX Board discussed with ChampionX’s senior management and the company’s advisors the fact that the share price of both companies’ stock had continued to increase since the March 7 SLB Proposal and the impact of such movement on the ChampionX share price implied by the March 7 SLB Proposal. The ChampionX Board also acknowledged that the parties would need to discuss and align on a final exchange ratio and directed ChampionX’s senior management to continue to work with ChampionX’s advisors to finalize due diligence and progress transaction documentation in parallel.

On March 18, 2024, representatives of ChampionX management and SLB management met to discuss the potential synergies that could be generated as a result of the potential transaction. No specific transaction terms were discussed during this meeting.

Also on March 18, 2024, Latham sent Weil a draft merger agreement, which, among other things, (i) included a regulatory cooperation covenant that limited SLB’s obligation to agree to potential remedies to those that would not result in a loss of more than 5% of ChampionX’s aggregate annual 2023 revenues, (ii) did not include a regulatory reverse termination fee to be paid by SLB if the merger agreement was terminated for circumstances relating to the failure to obtain regulatory approvals or in the event of a legal restraint prohibiting the transaction, (iii) did not include a provision that would permit ChampionX to terminate the merger agreement in order to accept a “superior proposal,” (iv) included a provision that if the ChampionX Board changed its recommendation with respect to the SLB transaction, SLB could require ChampionX to allow the ChampionX shareholders to decide whether to support the transaction at a special meeting of the ChampionX shareholders (the “stockholder vote provision”) and (v) included a termination fee equal to 5% of the ChampionX equity value implied by the transaction to be paid by ChampionX if the merger agreement was terminated in the event that the ChampionX Board changed its recommendation or in certain cases where ChampionX consummated an alternative transaction.

On March 22, 2024, the ChampionX Board held a meeting by videoconference, which was attended by members of ChampionX senior management and representatives of Centerview and Weil. At the meeting, the ChampionX Board received an update on the synergy discussions with SLB earlier that week, the diligence process to date and an overview of key terms proposed by the draft merger agreement, including those related to regulatory matters and the stockholder vote provision. The ChampionX Board also discussed the terms of the March 7 SLB Proposal, including the fact that the offer price of $37.80 for each share of ChampionX common stock would need to be expressed as an exchange ratio pursuant to which each share of ChampionX common stock would convert into shares of SLB common stock. The ChampionX Board considered the potential implied exchange ratio based upon the closing trading price and volume weighted average trading price over different time periods of shares of SLB common stock. The ChampionX Board noted that the March 7 SLB Proposal had implied an exchange ratio of 0.744 based upon the closing trading price of SLB common stock as of March 7, 2024. The ChampionX Board expressed its continued support in respect of continuing discussions on the potential transaction with SLB and authorized Mr. Somasundaram to discuss an exchange ratio of 0.744 with Mr. Le Peuch, with the understanding that there likely would be further negotiation on the exchange ratio.

On March 24, 2024, Mr. Somasundaram contacted Mr. Le Peuch to discuss the proposed exchange ratio with respect to the transaction. During that discussion, Mr. Somasundaram indicated that consideration of $37.80 for each share of ChampionX common stock, payable in shares of SLB common stock, as proposed by the March 7 SLB Proposal implied an exchange ratio of 0.744 based upon the closing trading price of SLB common stock as

 

53


Table of Contents

of March 7, 2024. Mr. Somasundaram therefore proposed to Mr. Le Peuch an exchange ratio of 0.744 for the potential transaction. Mr. Le Peuch indicated to Mr. Somasundaram that this exchange ratio would not have the support of the SLB Board, but that SLB would continue to negotiate toward mutually agreeable transaction terms.

On March 24, 2024, Weil sent a revised draft merger agreement to Latham, which, among other things, (i) included a regulatory cooperation covenant that limited SLB’s obligation to agree to potential remedies to those that that would not reasonably be expected to be material to ChampionX and its subsidiaries, taken as a whole, (ii) proposed a regulatory reverse termination fee that would be payable by SLB equal to 7% of ChampionX’s equity value implied by the transaction, (iii) rejected the proposed stockholder vote provision, (iv) included a provision that would enable ChampionX to terminate the merger agreement to accept a “superior proposal” (the “superior proposal termination right”) and (v) proposed the termination fee that would be payable by ChampionX be equal to 2.5% of ChampionX’s equity value implied by the transaction.

On March 26, 2024, Latham sent a revised draft merger agreement to Weil, which, among other things, (i) included a regulatory cooperation covenant that limited SLB’s obligation to agree to potential remedies to those that would not result in a loss of more than 6.75% of ChampionX’s aggregate annual 2023 revenues, (ii) removed the proposed regulatory reverse termination fee that would be payable by SLB, (iii) reinserted the stockholder vote provision, (iv) removed the proposed superior proposal termination right and (v) proposed the termination fee that would be payable by ChampionX be equal to 4.25% of ChampionX’s equity value implied by the transaction.

On March 26, 2024, Mr. Nitin sent Mr. Kasibhatla an email emphasizing ChampionX’s position that the exchange ratio for the proposed transaction should equal 0.744 shares as conveyed by Mr. Somasundaram to Mr. Le Peuch on March 24, 2024, and further describing ChampionX’s rationale for its position.

On March 27, 2024, Mr. Kasibhatla, Ms. Dianne Ralston, Chief Legal Officer and Secretary of SLB, other members of SLB management, representatives of Latham, Ms. Julia Wright, Senior Vice President, General Counsel and Secretary of ChampionX, and representatives of Weil held a meeting by videoconference to discuss certain open points on the draft merger agreement, including, among others, the regulatory cooperation covenant, the regulatory reverse termination fee, the stockholder vote provision, the superior proposal termination right and the termination fee.

Following such discussion, later on March 27, 2024, Weil sent a revised draft merger agreement to Latham, which, among other things, (i) included a regulatory cooperation covenant that limited SLB’s obligation to agree to potential remedies to those that would not result in a loss of more than 15% of ChampionX’s aggregate annual 2023 revenues, (ii) reinserted a regulatory reverse termination fee what would be payable by SLB equal to 6.50% of ChampionX’s equity value implied by the transaction, (iii) proposed the termination fee that would be payable by ChampionX be equal to 3% of ChampionX’s equity value implied by the transaction, (iv) rejected the stockholder vote provision and (v) included the superior proposal termination right. Also on March 27, 2024, Weil sent to Latham an initial draft of the ChampionX disclosure schedules to the merger agreement.

Later on March 27, 2024, Mr. Le Peuch met with Mr. Somasundaram in Houston, Texas to convey that SLB was proposing an exchange ratio for the transaction of 0.72 shares of SLB common stock for each share of ChampionX common stock. During that discussion, Mr. Somasundaram noted that such exchange ratio would not provide sufficient value for ChampionX stockholders, particularly given the increases in both companies’ share prices since March 7, 2024, and suggested that a special cash dividend to be paid by ChampionX to its stockholders prior to the closing of the potential transaction may address the perceived gap in value. Mr. Le Peuch indicated that SLB would consider the exchange ratio, as well as the potential cash dividend.

On March 28, 2024, the SLB Board held a meeting by videoconference, which was attended by members of SLB senior management. At the meeting, SLB management provided the SLB Board with an update on recent

 

54


Table of Contents

discussions between SLB and ChampionX and discussed key terms that were subject to continuing negotiation in the merger agreement, including, among others, the inclusion of the stockholder vote provision, the amount and triggers to payment of termination fees payable by each of ChampionX and SLB, and certain employment-related matters. The SLB Board authorized SLB management to continue to negotiate a transaction with ChampionX within certain price parameters agreed during the meeting.

Also on March 28, 2024, the ChampionX Board held a meeting by videoconference, which was attended by members of ChampionX senior management and representatives of Centerview and Weil. At the meeting, the ChampionX Board discussed the potential benefits and synergies of the transaction based on diligence findings and received updates on legal and other diligence findings to date, key terms of and open points in the draft merger agreement and other transaction work streams. The ChampionX Board also discussed with ChampionX’s senior management and the company’s advisors the prior day’s discussion between Mr. Somasundaram and Mr. Le Peuch, the recent share prices of SLB and ChampionX, the range of potential exchange ratios that could be applicable in the potential transaction, and what these exchange ratios implied in terms of value to holders of ChampionX common stock, as well as ways to address the gap in valuation between the parties, including with a special cash dividend to be paid to ChampionX stockholders. Following discussion and deliberation, the ChampionX Board expressed its support in respect of continuing discussions on the potential transaction with SLB, with the understanding that SLB would be reverting with a proposal on the exchange ratio.

On March 29, 2024, Mr. Le Peuch contacted Mr. Somasundaram to inform him that SLB would be sending Mr. Somasundaram a revised written non-binding proposal (the “March 29 SLB Proposal”). Thereafter, Mr. Le Peuch sent a letter to Mr. Somasundaram setting forth the March 29 SLB Proposal, which proposed (i) an exchange ratio of 0.73 shares of SLB common stock for each share of ChampionX common stock, (ii) a regulatory cooperation covenant that limited SLB’s obligation to agree to potential remedies to those that would not result in a loss of more than 8% of ChampionX’s aggregate annual 2023 revenues, (iii) a regulatory reverse termination fee that would be payable by SLB equal to 3.25% of ChampionX’s enterprise value implied by the transaction, (iv) a termination fee that would be payable by ChampionX equal to 3.25% of ChampionX’s enterprise value implied by the transaction, (v) the stockholder vote provision and (vi) no special cash dividends. Promptly following receipt, Mr. Somasundaram shared the March 29 SLB Proposal with the ChampionX Board and the company’s advisors.

Also on March 29, 2024, Latham sent to Weil a revised draft merger agreement that reflected terms consistent with those in the March 29 SLB Proposal and an initial draft of the SLB disclosure schedules.

Also on March 29, 2024, and following receipt of the March 29 SLB Proposal, the ChampionX Board held a meeting by videoconference, which was attended by members of ChampionX senior management and representatives of Centerview and Weil, to discuss the terms of the March 29 SLB proposal. Representatives of Centerview reviewed with the ChampionX Board Centerview’s preliminary financial analyses of the proposed exchange ratio of 0.73 shares of SLB common stock for each share of ChampionX common stock. The ChampionX Board discussed the illustrative value contemplated by the March 29 SLB Proposal, as well as how it compared to ChampionX’s proposal of an exchange ratio of 0.744 shares of SLB common stock for each share of ChampionX common stock, and ways to address the gap in value, including the possibility of paying a special cash dividend to ChampionX stockholders and how much cash would be needed to support such a proposal. The ChampionX Board also discussed and considered the other terms included in the March 29 SLB Proposal, including with respect to regulatory matters, contractual rights to pursue alternative transactions and transaction certainty, including the fact that they did not believe that a termination fee of 3.25% of ChampionX’s enterprise value implied by the terms of the transaction, nor the stockholder vote provision, would preclude any other potential acquirer from making a proposal to acquire ChampionX following the announcement of the potential transaction, if such a potential acquirer wanted to do so. Following deliberation, the ChampionX Board directed Mr. Somasundaram to prepare a written proposal to SLB setting forth the terms discussed with the ChampionX Board.

 

55


Table of Contents

Later on March 29, 2024, Mr. Somasundaram contacted Mr. Le Peuch to inform him that ChampionX would be sending a written response to SLB’s latest proposal (the “March 29 ChampionX Proposal”) and, thereafter, sent Mr. Le Peuch the March 29 ChampionX Proposal. The March 29 ChampionX Proposal proposed (i) an exchange ratio of 0.73 shares of SLB common stock for each share of ChampionX common stock, and the ability of the ChampionX Board to declare and to pay a special cash dividend of $0.60 for each share of ChampionX common stock prior to the closing of the potential transaction, (ii) a regulatory cooperation covenant that limited SLB’s obligation to agree to potential remedies to those that would not result in a loss of more than 15% of ChampionX’s aggregate annual 2023 revenues and (iii) a regulatory reverse termination fee that would be payable by SLB equal to 4% of ChampionX’s enterprise value implied by the transaction.

On March 30, 2024, Mr. Kasibhatla requested, and Mr. Saurabh Nitin provided, additional due diligence materials relating to ChampionX’s cash flow forecast.

Also on March 30, 2024, Mr. Le Peuch contacted Mr. Somasundaram to inform him that SLB would be sending a revised written non-binding proposal (the “March 30 SLB Proposal”). During that discussion, Mr. Le Peuch noted to Mr. Somasundaram that the March 30 SLB Proposal represented SLB’s final position with respect to the economic terms of the potential transaction. Thereafter, Mr. Le Peuch sent Mr. Somasundaram the March 30 SLB Proposal, which proposed (i) an exchange ratio of 0.735 shares of SLB common stock for each share of ChampionX common stock, with no special cash dividend to ChampionX stockholders prior to the closing of the potential transaction, (ii) a regulatory cooperation covenant that limited SLB’s obligation to agree to potential remedies to those that would not result in a loss of more than 8% of ChampionX’s aggregate annual 2023 revenues and (iii) a regulatory reverse termination fee that would be payable by SLB equal to 4% of ChampionX’s enterprise value implied by the transaction. Promptly following receipt, Mr. Somasundaram shared the March 30 SLB Proposal with the ChampionX Board and the company’s advisors.

On March 30, 2024, and following receipt of the March 30 SLB Proposal, an update call was held with the ChampionX Board, members of ChampionX senior management and representatives of Centerview and Weil to consider the terms of the March 30 SLB Proposal. Representatives of Centerview reviewed with the ChampionX Board, Centerview’s preliminary financial analyses of the proposed exchange ratio of 0.735 shares of SLB common stock for each share of ChampionX common stock. Following discussion and deliberation, the ChampionX Board expressed their support for the exchange ratio and for the other terms of the March 30 SLB Proposal, subject to finalizing the documentation with respect to the transaction on terms acceptable to ChampionX.

Later on March 30, 2024, Mr. Somasundaram contacted Mr. Le Peuch to indicate ChampionX’s acceptance of the March 30 SLB Proposal, which Mr. Somasundaram subsequently confirmed via email.

Also on March 30, 2024, Weil sent comments on the draft merger agreement to Latham that, consistent with the ChampionX Board’s support of the March 30 SLB Proposal, reflected terms consistent with those of the March 30 SLB Proposal.

During the course of April 1, 2024, representatives of Latham and Weil negotiated remaining open terms of the draft merger agreement.

On April 1, 2024, the SLB Board held a meeting by videoconference, which was attended by members of SLB senior management. During the meeting, members of SLB’s management reviewed the history of negotiations with ChampionX and the principal terms of the draft merger agreement. The SLB Board discussed the strategic rationale for the potential transaction, the valuation implied by the exchange ratio, the synergies and potential benefits from the transaction, the risks associated with consummating the potential transaction, and the anticipated timing to closing, as well as the communication plan with stockholders, customers, employees, and other key constituents, and the proposed communications strategy in connection with the announcement of the proposed transaction. Following such discussion, the SLB Board approved SLB’s entry into the Merger Agreement and related matters.

 

56


Table of Contents

In the evening of April 1, 2024, the ChampionX Board held a meeting by videoconference, which was attended by members of ChampionX senior management and representatives of Centerview and Weil. During the meeting, members of ChampionX’s management and its financial and legal advisors reviewed the history of negotiations with SLB and the terms of the draft merger agreement, which had been circulated to the ChampionX Board in advance of the meeting. Representatives of Centerview reviewed with the ChampionX Board Centerview’s financial analyses of the exchange ratio provided for in the proposed merger agreement. Representatives of Weil then reviewed with the ChampionX Board their fiduciary duties under Delaware law in the context of their consideration of the potential transaction, the principal terms of the draft merger agreement and a description of the other transaction documents, including the ChampionX disclosure schedules, the SLB disclosure schedules and the form of the certificate of incorporation of ChampionX. Representatives of Weil noted to the ChampionX Board that Weil and senior management were continuing to finalize certain provisions in the draft merger agreement, as well as the likely resolutions of such terms. The ChampionX Board discussed the strategic rationale for the potential transaction, the valuation implied by the exchange ratio, the value of the SLB common stock, the ability of ChampionX stockholders to participate in the value and opportunities of SLB after the merger, the synergies and potential benefits from the transaction as compared with the company’s standalone plan, the risks associated with consummating the potential transaction and the timing to closing, as well as the communication plan with stockholders, customers, employees, and other key constituents and the proposed communications strategy in connection with the announcement of the proposed transaction. Thereafter, representatives of Centerview rendered Centerview’s oral opinion, which was subsequently confirmed by delivery of its written opinion, to the ChampionX Board on April 1, 2024, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the exchange ratio provided for pursuant to the proposed merger agreement was fair, from a financial point of view, to holders of ChampionX common stock (other than holders of shares of ChampionX excluded stock). For more information, see the section of this proxy statement/prospectus entitled “—Opinion of Centerview.” Also at the meeting, representatives of Weil and Mr. Somasundaram outlined for the ChampionX Board the proposed terms of Centerview’s engagement pursuant to a formal engagement letter with Centerview. The ChampionX Board then authorized ChampionX to formally engage Centerview through entry into the engagement letter.

Following further discussion and deliberation, including taking into account the factors described below in greater detail in the section of this proxy statement/prospectus entitled “—ChampionX’s Reasons for the Merger; Recommendation of the ChampionX Board,” the ChampionX Board unanimously (i) determined the merger agreement and the consummation of the merger and the transactions, to be fair to and in the best interests of ChampionX and its stockholders, (ii) declared the merger agreement and the consummation of the transactions, including the merger, to be advisable, (iii) authorized and approved the merger agreement, including the execution, delivery and performance thereof, (iv) directed that the merger agreement be submitted to the stockholders of ChampionX for their consideration and adoption and (v) recommended that the stockholders of ChampionX adopt the merger agreement.

Following the meeting of the ChampionX Board, on April 1, 2024, ChampionX entered into an engagement letter with Centerview.

Throughout the evening of April 1, 2024 and early into the morning on April 2, 2024, representatives of ChampionX, SLB, Latham and Weil continued to finalize the outstanding terms of the draft merger agreement and the other transaction documents. The final transaction documents, including the merger agreement, ChampionX disclosure schedules, SLB disclosure schedules and the form of the certificate of incorporation of ChampionX as the surviving entity in the merger, all in a form consistent with the terms described to the ChampionX Board at the earlier meeting, were provided to the ChampionX Board on the morning of April 2, 2024, at which time the ChampionX Board unanimously confirmed their prior approval of, among other things, ChampionX’s entry into the merger agreement. Thereafter, the parties executed the merger agreement on the morning of April 2, 2024.

 

57


Table of Contents

In the morning of April 2, 2024, the boards of directors of each of Sodium Holdco and Sodium Merger Sub held meetings at which they approved, among other things, the entry into the merger agreement by those respective entities.

Before the opening of financial markets in New York on April  2, 2024, ChampionX and SLB issued a joint press release announcing the execution of the merger agreement.

ChampionX’s Reasons for the Merger; Recommendation of the ChampionX Board of Directors

On April 1, 2024, the ChampionX Board unanimously (i) determined the Merger Agreement and the consummation of the Merger and the Transactions, to be fair to and in the best interests of ChampionX and its stockholders, (ii) declared the Merger Agreement and the consummation of the Transactions, including the Merger, to be advisable, (iii) authorized and approved the Merger Agreement, including the execution, delivery and performance thereof, (iv) directed that the Merger Agreement be submitted to the stockholders of ChampionX for their consideration and adoption and (v) recommended the stockholders of ChampionX adopt the Merger Agreement.

Accordingly, the ChampionX Board unanimously recommends that the ChampionX stockholders vote “FOR” the Merger Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.

In the course of reaching its determinations and recommendations, the ChampionX Board reviewed and discussed a significant amount of information, consulted with and received the advice of ChampionX’s outside legal and financial advisors, held discussions with ChampionX’s management and considered a number of factors that it believed supported its decision to enter into the Merger Agreement. The following are some of the significant factors that supported the ChampionX Board’s determination to approve the Merger Agreement and recommend adoption of the Merger Agreement by the ChampionX stockholders (which are presented below in no particular order and are not exhaustive):

Benefits of the Combination.

 

   

The belief that the expected business, assets, financial condition, results of operations, business plan and prospects of ChampionX and SLB as a combined business would better position the Combined Company as a leader in the production space, with world-class production chemicals and artificial lift and digital technologies that together, are expected to be superior than those of ChampionX on a standalone basis;

 

   

The belief that SLB’s international footprint would allow the Combined Company to accelerate deployment of ChampionX’s products and technologies;

 

   

The belief that ChampionX and SLB have a complementary footprint, customer profile and technology capability and will drive customer value through deep industry expertise and digital integration, as well as enhanced equipment life and production optimization;

 

   

The belief that, while ChampionX has differentiated products and technology as well as a strong financial engine, the combination of ChampionX and SLB creates a broader portfolio and adds the resources and reach to enhance ChampionX’s expertise in production chemicals, artificial lift, drilling technologies, digital and emissions, as well as accelerate technology innovation in digital technologies and emissions; and

 

   

The belief that ChampionX and SLB share a vision for the future of energy that leverages technology and innovation to solve customers’ most complex problems and better serve the communities in which they operate in an economically and environmentally sustainable way.

Value and Composition of the Consideration.

 

   

The fact that the Exchange Ratio of 0.735 shares of SLB common stock for each share of ChampionX common stock implied consideration for each share of ChampionX common stock of $40.59, based on

 

58


Table of Contents
 

the closing price of SLB common stock as of April 1, 2024 (the last trading day prior to announcement of the Transactions), representing a 14.7% premium as compared to the closing price of ChampionX common stock as of April 1, 2024, and a 21.7% premium as compared to the 20-trading day volume weighted average trading price of ChampionX common stock as of April 1, 2024;

 

   

The fact that the all-stock nature of the Equity Consideration allows ChampionX stockholders to participate in the value and opportunities of SLB after the Merger, including distributions and expected future growth;

 

   

The fact that ChampionX stockholders as of immediately prior to the Merger will own approximately 9% of the outstanding shares of SLB common stock immediately following the closing (based on the number of shares of ChampionX common stock and SLB common stock outstanding as of April 1, 2024 on a fully diluted basis), which would allow current ChampionX stockholders the opportunity to participate in future earnings and growth of SLB and fully enjoy the benefits of the Merger through the realization of anticipated synergies;

 

   

The fact that the Exchange Ratio provides for a fixed number of shares of SLB common stock for each share of ChampionX common stock, which provides ChampionX stockholders the opportunity to benefit from any increase in the trading price of SLB common stock prior to the closing;

 

   

The fact that the Exchange Ratio was the result of extensive negotiation between the parties, including that the proposed Exchange Ratio had been increased on two separate occasions and the ChampionX Board’s belief that the final Exchange Ratio represented the best value that ChampionX could obtain from SLB;

 

   

The fact that SLB pays quarterly cash dividends to its stockholders and that ChampionX stockholders will be entitled to participate in and receive any dividends or distributions paid on the shares of SLB common stock with a record date at or after the effective time of the Merger; and

 

   

The ChampionX Board’s belief, after consideration of the potential for and benefits of alternative transactions, that it was unlikely that any reasonably available alternative transaction would result in more long-term value to ChampionX stockholders or deal certainty than would the Merger.

Synergies and Strategic Considerations.

 

   

The belief that the combination of ChampionX and SLB provides compelling value creation and the opportunity to share in significant upside from the realization of synergies (reaching approximately $400 million pre-tax on an annualized basis within three years post-closing), including accelerated growth opportunities given the complementary nature of the respective portfolios;

 

   

The belief of the ChampionX Board that the combination of SLB’s and ChampionX’s businesses will allow the Combined Company to achieve cost savings and potentially pursue additional commercial opportunities while enhancing the Combined Company’s ability to serve customers and potentially result in improved opportunities for growth as compared to the prospects of ChampionX on a standalone basis;

 

   

The belief of the ChampionX Board that the Merger is more favorable to ChampionX stockholders than the other strategic alternatives available to ChampionX, including remaining as a standalone company, taking into consideration the feasibility of such alternatives and the significant risks and uncertainties associated with pursuing such alternatives;

 

   

The fact that the financial profile of the Combined Company relative to that of ChampionX as a standalone company, has a more diversified revenue base with respect to product and service offerings, customers and geography, and greater free cash flow and the anticipated market capitalization, liquidity and capital structure of the Combined Company;

 

59


Table of Contents
   

The ChampionX Board’s familiarity with, and understanding of, ChampionX’s business, current business strategy and prospects, including the ChampionX Board’s views of the challenges and opportunities facing the oil and gas industry;

 

   

The current and prospective business climate in the industries in which ChampionX and SLB operate, including the position of current and likely competitors of ChampionX and SLB, as well as the financial condition of the U.S. and global economies in general; and

 

   

The risk that pursuing other potential alternatives, including continuing to operate on a standalone basis, could have resulted in the loss of an opportunity to consummate the Merger with SLB.

Opinion of Financial Advisor.

 

   

The financial analyses prepared by Centerview and discussed with the ChampionX Board and the oral opinion of Centerview rendered to the ChampionX Board on April 1, 2024, which was subsequently confirmed in writing, to the effect that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Exchange Ratio provided for pursuant to the Merger Agreement was fair, from a financial point of view, to holders of ChampionX Common Stock (other than holders of shares of ChampionX Excluded Stock and any shares of ChampionX Common Stock held by any affiliate of ChampionX or SLB). For a detailed discussion of Centerview’s opinion, please see below under section entitled “—Opinion of ChampionX’s Financial Advisor.” The written opinion delivered by Centerview is attached to this proxy statement/prospectus as Annex B.

Due Diligence.

 

   

The fact that the ChampionX Board considered the results of the due diligence reviews of SLB and its business conducted by ChampionX’s management and its outside advisors;

 

   

The absence of other strategic alternatives available to ChampionX that would provide comparable or superior value and terms, based in part on the ChampionX Board’s recognition of the risks and uncertainties related to increased competition in the markets in which ChampionX competes or may compete in the future; and

 

   

The historical and current market prices of ChampionX common stock and SLB common stock.

Likelihood of Completion of the Transaction.

 

   

The fact that the Merger and the issuance of SLB common stock in connection with the Merger are not subject to a vote of SLB shareholders;

 

   

The lack of a financing condition to closing;

 

   

The level of the commitments by the parties to obtain applicable regulatory approvals, including the fact that SLB would be required to pay ChampionX a termination fee of $326.6 million, which constitutes approximately 4% of ChampionX’s enterprise value in the Merger, under certain circumstances relating to termination of the Merger Agreement for the failure to obtain clearances under certain specified regulatory laws or in the event of a Mutual Legal Restraint that prohibits, prevents or makes illegal the consummation of the Transactions;

 

   

The assessment of the ChampionX Board, after considering the advice of counsel, regarding the likelihood of obtaining applicable regulatory approvals;

 

   

The circumstances under which the Merger Agreement can be terminated and the impact of such termination (see the section entitled “The Merger Agreement—Termination of the Merger Agreement”); and

 

60


Table of Contents
   

ChampionX’s ability, under circumstances specified in the Merger Agreement, to seek specific performance of SLB’s and Merger Sub’s obligation to cause the Merger to occur and to prevent other breaches of the Merger Agreement.

Terms of the Merger Agreement.

 

   

The belief that, in coordination with ChampionX’s legal advisors, the terms of the Merger Agreement, taken as a whole, including the parties’ representations, warranties, covenants and conditions to closing, and the circumstances under which the Merger Agreement may be terminated, are reasonable;

 

   

The fact that ChampionX has the ability, at any time prior to obtaining the ChampionX Stockholder Approval and under certain circumstances, to consider and respond to an unsolicited alternative acquisition proposal, to furnish non-public information to the person making such a proposal and to engage in discussions or negotiations with the person making such a proposal;

 

   

The fact that the ChampionX Board may, under certain circumstances, withhold, withdraw, modify or qualify its recommendation to ChampionX stockholders that they vote in favor of the adoption of the Merger Agreement or to approve, endorse or recommend an alternative acquisition proposal; and

 

   

The fact that the Merger Agreement would permit the ChampionX Board to consider an unsolicited superior proposal from a third party and/or change its recommendation that ChampionX stockholders vote in favor of the Merger Proposal, subject to the requirement that ChampionX provides SLB the opportunity to propose revisions to the terms of the Transactions, and that the ChampionX Board, after discussing the ChampionX Termination Fee of $265.4 million with its advisors, believed that such fee, which constitutes approximately 3.25% of ChampionX’s enterprise value in the Merger, was consistent with market practice.

In the course of its deliberations, the ChampionX Board also considered a variety of risks, uncertainties and other countervailing factors related to entering into the Merger Agreement, the Merger and the other Transactions, including but not limited to (not necessarily presented in order of relative importance):

 

   

Risks Associated with Regulatory Approvals. The amount of time it could take to complete the regulatory approval process and consummate the Merger. In particular, the Merger is conditioned on the absence of legal restraints under certain specified regulatory laws, the expiration or termination of the waiting period under the HSR Act, the receipt of CFIUS approval (if SLB determines it is required), and the receipt of antitrust regulatory clearances in certain jurisdictions, including Australia, Brazil, Canada, Mexico, New Zealand, Norway, Saudi Arabia and the United Kingdom. In addition, the obligation of SLB to consummate the Merger is conditioned on receipt of clearances in respect of filings made under specified regulatory laws (if SLB determines they are required), and the absence of legal restraints or pending investigations under specified regulatory laws as set forth in the Merger Agreement. Furthermore, while SLB is required to use reasonable best efforts to resolve any regulatory objections and to avoid or eliminate impediments under regulatory laws, SLB is not obligated to accept or agree to certain divestiture or other remedies to obtain antitrust approvals except to the extent that such remedial action (i) does not involve any businesses, assets, equity interests, product lines, properties, contracts, agreements, commercial arrangements, relationships, ventures, rights or obligations of SLB or its affiliates or the Chemical Technologies business of ChampionX and its subsidiaries and (ii) would not, or would not reasonably be expected to, individually or in the aggregate, result in a loss of more than 8% of the aggregate annual revenues of ChampionX and its subsidiaries, taken as a whole, as measured by the 12 months ended December 31, 2023;

 

   

Fixed Exchange Ratio. The fact that the Exchange Ratio provides for a fixed number of shares of SLB common stock for each share of ChampionX common stock, meaning ChampionX stockholders cannot be sure at the time they vote on the Merger of the market value of the Equity Consideration they will receive, and the possibility that ChampionX stockholders could be adversely affected by a decrease in the market price of SLB common stock before the closing;

 

61


Table of Contents
   

Risks Associated with ChampionX Stockholder Approval. The fact that the Merger is subject to the adoption of the Merger Agreement by ChampionX stockholders, and ChampionX stockholders would be free to reject the Merger by voting against the adoption of the Merger Agreement for any reason, including if a higher offer were to be made prior to the ChampionX Special Meeting;

 

   

Risks Associated with Alternative Acquisition Proposals. The provisions of the Merger Agreement that permit the ChampionX Board to change its recommendation, subject to the requirement that ChampionX provide SLB the opportunity to propose revisions to the terms of the Transactions, but that do not permit ChampionX to terminate the Merger Agreement to accept a superior proposal, or to solicit or participate in discussions or negotiations regarding alternative acquisition proposals, subject to specified exceptions;

 

   

Termination Fee. The possibility that ChampionX would be required to pay to SLB a termination fee of $265.4 million in the event the Merger Agreement is terminated by SLB prior to receipt of the ChampionX Stockholder Approval if the ChampionX Board fails to recommend the adoption of the Merger Agreement, changes its recommendation or takes certain other actions as set forth in the Merger Agreement, subject in each case to certain exceptions;

 

   

Satisfaction of Closing Conditions. The risk that one or more of the conditions to the closing may not be satisfied on a timely basis, if at all;

 

   

Risks Associated with Pendency of the Merger. The risks and contingencies relating to the announcement and pendency of the Merger, including the potential negative impact on ChampionX’s ability to retain key employees, the diversion of management and employee attention, the potential disruptive effects of the pendency of the Merger on ChampionX’s day-to-day operations and ChampionX’s relationships with third parties, including its customers and suppliers, the transactions costs to be incurred in connection with the Transactions and the potential impact on ChampionX’s stock price;

 

   

Interim Operating Risks. The restrictions in the Merger Agreement on the conduct of ChampionX’s business prior to the consummation of the Merger, which may delay or prevent ChampionX from undertaking business opportunities that may arise or taking other actions it would otherwise take with respect to the operations of ChampionX pending consummation of the Merger;

 

   

Possible Failure to Achieve Synergies. The challenges inherent in the combination of two businesses of the size and complexity of ChampionX and SLB, including the possibility that the Combined Company will not realize all of the anticipated strategic and other benefits of the Merger, the risk that expected synergies may not be realized or may cost more to achieve than anticipated, the risk that any accommodations required by regulatory authorities may decrease the anticipated strategic and other benefits of the Merger and the risks associated with successfully integrating ChampionX’s business, operations and workforce with those of SLB;

 

   

Tax Treatment. The fact that the Merger would be a transaction in which gain or loss is recognized by ChampionX’s stockholders that are treated as U.S. holders for U.S. federal income tax purposes;

 

   

Appraisal Rights. The fact that ChampionX stockholders will not be entitled to appraisal rights in connection with the Merger;

 

   

Lack of Auction Process. The fact that ChampionX negotiated solely with SLB rather than conducting a public or private “auction” or sales process of ChampionX;

 

   

Remedies. The fact that ChampionX’s remedies in the event that the Merger Agreement is terminated may be limited to a termination fee of $326.6 million, payable by SLB under certain circumstances and certain associated enforcement costs and reimbursement obligations, which may be inadequate to compensate ChampionX for any damage caused; and

 

   

Other Risks. The risks of the type and nature described under “Risk Factors” and the matters described under “Cautionary Note Regarding Forward-Looking Statements.”

 

62


Table of Contents

In addition, the ChampionX Board was aware of and considered the interests of its directors and executive officers that are different from, or in addition to, the interests of ChampionX stockholders generally. See the section entitled “The Merger—Interests of ChampionX’s Directors and Executive Officers in the Merger.

The foregoing discussion of information and factors considered by the ChampionX Board is not, and is not intended to be, exhaustive but summarizes the material factors considered by the ChampionX Board. In light of the variety of factors considered in connection with their evaluation of the Merger Agreement and the Merger, the ChampionX Board did not find it useful to, and did not, quantify, rank or otherwise assign relative weights to the specific factors considered in reaching their determinations and recommendations. Moreover, each member of the ChampionX Board applied his or her own personal business judgment to the process and may have given different weight to different factors. The ChampionX Board based its recommendation on the totality of the information presented, including thorough discussions with, and questioning of, ChampionX’s senior management and outside legal and financial advisors.

It should be noted that this explanation of the reasoning of the ChampionX Board and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

SLB’s Reasons for the Merger

SLB believes the Merger will create sustainable long-term value for its stockholders. Key factors considered by SLB include the following:

 

   

SLB’s belief that the acquisition of ChampionX will strengthen SLB as a leader in the production space, with world-class production chemicals and artificial lift technologies;

 

   

SLB’s belief that the combined and complementary portfolios of SLB and ChampionX will drive customer value through deep industry expertise and digital integration, as well as enhanced equipment life and production optimization for SLB’s customers;

 

   

SLB’s belief that the combined portfolios of SLB and ChampionX will allow for greater innovation, market reach and customer choice and value;

 

   

SLB’s belief that its core oil and gas business will continue to be a key engine of growth, and that deliberately increasing SLB’s exposure to the production and recovery space will align it with the growing and resilient operating expense spend category of its customers into the next decade;

 

   

SLB’s belief that the Combined Company will help its global customers drive efficiency and longevity of producing assets;

 

   

SLB’s belief that the transaction will strengthen SLB’s international offering while driving innovation and efficiency in North America through SLB’s and ChampionX’s complementary footprints;

 

   

The fact that SLB has been interested for several years in expanding its production and recovery portfolio, particularly in the production chemistry space;

 

   

SLB’s belief that annual pre-tax synergies resulting from the transaction will reach approximately $400 million within the first three years following the closing of the Merger, primarily through revenue growth and cost savings; and

 

   

SLB’s belief that the transaction will be accretive to free cash flow per share in the year following closing and accretive to earnings per share within two years of closing.

Listing of SLB Common Stock and Delisting and Deregistration of ChampionX Common Stock

SLB will use reasonable best efforts to cause the SLB common stock to be issued and delivered in the Merger and such other SLB common stock to be reserved for issuance in connection with the Merger to be approved for

 

63


Table of Contents

listing on the NYSE, where SLB common stock is currently traded. If the Merger is completed, shares of ChampionX common stock will be delisted from Nasdaq, will be deregistered under the Exchange Act and will cease to be publicly traded.

Opinion of ChampionX’s Financial Advisor

On April 1, 2024, Centerview rendered to the ChampionX Board its oral opinion, subsequently confirmed by delivery of a written opinion dated April 1, 2024, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Exchange Ratio provided for pursuant to the Merger Agreement was fair, from a financial point of view, to holders of ChampionX common stock (other than holders of shares of ChampionX Excluded Stock and any shares of ChampionX common stock held by any affiliate of ChampionX or SLB).

The full text of Centerview’s written opinion, dated April 1, 2024, which describes the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex B to this proxy statement/prospectus and is incorporated by reference into this proxy statement/prospectus. The summary of the written opinion of Centerview set forth below is qualified in its entirety by reference to the full text of Centerview’s written opinion attached as Annex B to this proxy statement/prospectus and incorporated by reference into this proxy statement/prospectus. Centerview’s financial advisory services and opinion were provided for the information and assistance of the ChampionX Board (in the directors’ capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Merger and the Transactions and Centerview’s opinion addressed only the fairness, from a financial point of view, as of the date thereof, to the holders of shares of ChampionX common stock (other than holders of shares of ChampionX Excluded Stock and any shares of ChampionX common stock held by any affiliate of ChampionX or SLB) of the Exchange Ratio provided for pursuant to the Merger Agreement. Centerview’s opinion did not address any other term or aspect of the Merger Agreement, the Merger or the Transactions and does not constitute a recommendation to any ChampionX stockholder or any other person as to how such stockholder or other person should vote with respect to the Merger or otherwise act with respect to the Merger and the Transactions or any other matter.

The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.

In connection with rendering the opinion described above and performing its related financial analyses, Centerview reviewed, among other things:

 

   

a draft of the Merger Agreement, dated April 1, 2024 (the “Draft Merger Agreement”);

 

   

Annual Reports on Form 10-K of ChampionX for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 and Annual Reports on Form 10-K of SLB for the years ended December 31, 2023, December 31, 2022 and December 31, 2021;

 

   

certain interim reports to ChampionX stockholders and SLB shareholders and Quarterly Reports on Form 10-Q of ChampionX and SLB;

 

   

certain publicly available research analyst reports for ChampionX and SLB;

 

   

certain other communications from ChampionX and SLB to their respective stockholders; and

 

   

certain internal information (collectively, the “ChampionX Internal Data”) relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of ChampionX, including certain financial forecasts, analyses and projections relating to ChampionX prepared by management of ChampionX and furnished to Centerview by ChampionX for purposes of Centerview’s analysis (the “ChampionX Forecast”) and which are described further below in the section entitled “Certain Unaudited Forecasted Financial Information.”

 

64


Table of Contents

Centerview also participated in discussions with members of the senior management and representatives of ChampionX regarding their assessment of the ChampionX Internal Data, as appropriate, and the strategic rationale for the Merger. In addition, Centerview reviewed publicly available financial and stock market data, including valuation multiples, for ChampionX and SLB and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that Centerview deemed relevant. Centerview also conducted such other financial studies and analyses and took into account such other information as Centerview deemed appropriate.

Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Centerview for purposes of its opinion and, with consent of the ChampionX Board, Centerview relied upon such information as being complete and accurate. In that regard, Centerview assumed, at the ChampionX Board’s direction, that the ChampionX Internal Data (including, without limitation, the ChampionX Forecast) were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of ChampionX as to the matters covered thereby and Centerview relied, at the ChampionX Board’s direction, on the ChampionX Internal Data for purposes of Centerview’s analysis and opinion. Centerview expressed no view or opinion as to the ChampionX Internal Data or the assumptions on which it was based. In addition, at the ChampionX Board’s direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of ChampionX or SLB, nor was Centerview furnished with any such evaluation or appraisal, and Centerview was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of ChampionX or SLB. Centerview assumed, at the ChampionX Board’s direction, that the final executed Merger Agreement would not differ in any respect material to Centerview’s analysis or opinion from the Draft Merger Agreement reviewed by Centerview. Centerview also assumed, at the ChampionX Board’s direction, that the Merger will be consummated on the terms set forth in the Merger Agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Centerview’s analysis or Centerview’s opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Merger and the Transactions, no delay, limitation, restriction, condition or other change, including any divestiture requirements or amendments or modifications, will be imposed, the effect of which would be material to Centerview’s analysis or Centerview’s opinion. Centerview did not evaluate and did not express any opinion as to the solvency or fair value of ChampionX or SLB, the ability of ChampionX or SLB to pay their respective obligations when they come due, or as to the impact of the Merger and the other Transactions on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and Centerview expressed no opinion as to any legal, regulatory, tax or accounting matters.

Centerview’s opinion expressed no view as to, and did not address, ChampionX’s underlying business decision to proceed with or effect the Merger and the Transactions, or the relative merits of the Merger and the Transactions as compared to any alternative business strategies or transactions that might be available to ChampionX or in which ChampionX might engage. Centerview’s opinion was limited to and addressed only the fairness, from a financial point of view, as of the date of Centerview’s written opinion, to the holders of shares of ChampionX common stock (other than holders of shares of ChampionX Excluded Stock and any shares of ChampionX common stock held by any affiliate of ChampionX or SLB) of the Exchange Ratio provided for pursuant to the Merger Agreement. For purposes of its opinion, Centerview was not asked to, and Centerview did not, express any view on, and its opinion did not address, any other term or aspect of the Merger Agreement, Merger or the Transactions, including, without limitation, the structure or form of the Merger or any other agreements or arrangements contemplated by the Merger Agreement or entered into in connection with or otherwise contemplated by the Merger, including, without limitation, the fairness of the Merger or any other term or aspect of the Merger and the Transactions to, or any consideration to be received in connection therewith by, or the impact of the Merger and the Transactions on, the holders of any other class of securities, creditors or other constituencies of ChampionX or any other party. In addition, Centerview expressed no view or opinion as to the

 

65


Table of Contents

fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of ChampionX or any party, or class of such persons in connection with the Merger and the Transactions, whether relative to the Equity Consideration to be paid to the holders of shares of ChampionX common stock pursuant to the Merger Agreement or otherwise. Centerview’s opinion was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Centerview as of, the date of Centerview’s written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of Centerview’s written opinion. Centerview expressed no view or opinion as to what the value of the SLB common stock actually will be when issued pursuant to the Merger or the prices at which the ChampionX common stock or SLB common stock will trade or otherwise be transferable at any time, including following the announcement or consummation of the Merger. Centerview’s opinion does not constitute a recommendation to any ChampionX stockholder or any other person as to how such ChampionX stockholder or other person should vote with respect to the Merger or otherwise act with respect to the Merger and the Transactions or any other matter. Centerview’s financial advisory services and its written opinion were provided for the information and assistance of the ChampionX Board (in the directors’ capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Merger and the Transactions. The issuance of Centerview’s opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.

Summary of Centerview Financial Analysis

The following is a summary of the material financial analyses prepared and reviewed with the ChampionX Board in connection with Centerview’s opinion, dated April 1, 2024. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinion of, Centerview, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Centerview. Centerview may have deemed various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized below should not be taken to be Centerview’s view of the actual value of ChampionX. Some of the summaries of the financial analyses set forth below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses performed by Centerview. Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view of the processes underlying Centerview’s financial analyses and its opinion. In performing its analyses, Centerview made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of ChampionX or any other parties to the Merger. None of ChampionX, SLB, Holdco, Merger Sub or Centerview or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of ChampionX do not purport to be appraisals or reflect the prices at which ChampionX may actually be sold. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before April 1, 2024 (the last trading day before the public announcement of the Merger) and is not necessarily indicative of current market conditions.

Selected Public Company Analysis

Centerview reviewed and compared certain financial information, ratios and multiples of ChampionX and compared it to corresponding financial information of certain publicly-traded, oilfield services and equipment companies (which companies are referred to as the “selected companies” in this summary of Centerview’s

 

66


Table of Contents

opinion) that Centerview, based on its experience and professional judgment, deemed relevant to consider in relation to ChampionX. Although none of the selected companies is identical or directly comparable to ChampionX, the selected companies were selected by Centerview because, among other reasons, they are publicly-traded, oilfield services and equipment companies with certain business, operational and/or financial characteristics that, for purposes of Centerview’s analysis, may be considered similar to those of ChampionX.

However, because none of the selected companies is exactly the same as ChampionX, Centerview believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected public company analysis. Accordingly, Centerview also made qualitative judgments, based on its experience and professional judgment, concerning differences between the business, operational and/or financial characteristics and other factors that could affect the public trading values of the selected companies and ChampionX in order to provide a context in which to consider the results of the quantitative analysis.

Using publicly available information obtained from SEC filings and other data sources as of April 1, 2024, Centerview calculated, for each selected company, such company’s enterprise value (calculated as the equity value (determined using the treasury stock method and taking into account outstanding in-the-money options, deferred stock units, restricted stock units, and performance share awards (including assumptions regarding the vesting of such performance share awards)), plus the book value of debt and certain liabilities less cash and cash equivalents) as a multiple of Wall Street research analyst consensus estimated adjusted EBITDA for calendar year 2024 (“EV/2024E Adj. EBITDA Multiple”).

The selected companies are summarized below:

 

Selected Company

   EV/2024E
Adj. EBITDA Multiple
 

Baker Hughes Company

     8.5x  

Cactus Inc

     10.3x  

Core Laboratories Inc.

     11.8x  

Halliburton Company

     7.7x  

Hunting plc

     5.8x  

NOV Inc.

     7.3x  

Schlumberger N.V. (SLB)

     9.4x  

Schoeller-Bleckmann Oilfield Equipment AG

     5.2x  

Tenaris S.A.

     5.3x  

Median

     7.7x  

Based on this analysis and other considerations that Centerview deemed relevant in its professional judgment and experience, related to, among other things, differences in the business, operational and/or financial conditions and prospects of ChampionX and the companies included in the selected public company analysis, Centerview selected a reference range of EV/2024E Adj. EBITDA Multiples of 8.5x to 9.5x. Centerview applied this reference range of EV/2024E Adj. EBITDA Multiples to ChampionX’s estimated calendar year 2024 adjusted EBITDA of $845 million as set forth in the ChampionX Forecast, subtracted the book value of ChampionX’s net debt as of December 31, 2023 of $312 million, as provided by ChampionX management, from the implied enterprise values and divided the results of the foregoing calculations by the number of fully diluted outstanding shares of ChampionX common stock (determined using the treasury stock method and taking into account outstanding in-the-money options, deferred stock units, restricted stock units, and performance share awards (including assumptions regarding the vesting of such performance share awards)) based on information provided by the management of ChampionX in the ChampionX Internal Data. This analysis resulted in an implied per share equity value range for shares of ChampionX common stock of approximately $35.25 to $39.50, rounded to the nearest $0.25. Centerview then compared this range to the Equity Consideration of $40.59 per share of ChampionX common stock implied by the Exchange Ratio and the $55.22 trading price of SLB common stock as of the close of trading on April 1, 2024 to be paid to the holders of shares of ChampionX common stock (other than ChampionX Excluded Stock) pursuant to the Merger Agreement.

 

67


Table of Contents

Discounted Cash Flow Analysis

Centerview performed a discounted cash flow analysis of ChampionX based on the ChampionX Forecast. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset or set of assets by calculating the “present value” of estimated future cash flows of the asset or set of assets. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

In performing this analysis, Centerview calculated an implied per share range of equity values for shares of ChampionX common stock by (a) discounting to present value as of December 31, 2023 using discount rates ranging from 11.00% to 12.50% (based on Centerview’s analysis of ChampionX’s weighted average cost of capital and considerations that Centerview deemed relevant based on its experience and professional judgment) and using a mid-year convention: (i) the forecasted after-tax unlevered free cash flows of ChampionX over the period beginning on January 1, 2024 and ending on December 31, 2028, as set forth in the ChampionX Forecast, utilized by Centerview at the direction of ChampionX management and as approved by the ChampionX Board for use by Centerview as set forth in the section captioned “Certain Unaudited Forecasted Financial Information,” and (ii) a range of illustrative terminal values of ChampionX, calculated by Centerview using a reference range of enterprise value-to-adjusted EBITDA multiples of 9.0x to 10.0x (which range was selected by Centerview using its experience and professional judgment) and applying this reference range of enterprise value-to-adjusted EBITDA multiples to ChampionX’s estimated last 12 months adjusted EBITDA as of December 31, 2028 and (b) subtracting from the foregoing results the book value of ChampionX’s net debt as of December 31, 2023 of $312 million, as provided by ChampionX management.

Centerview then calculated a range of implied equity values per share of ChampionX common stock by dividing the result of the foregoing calculations by the number of fully diluted outstanding shares of ChampionX common stock (determined using the treasury stock method and taking into account outstanding in-the-money options, deferred stock units, restricted stock units, and performance share awards (including assumptions regarding the vesting of such performance share awards)) based on information provided by the management of ChampionX in the ChampionX Internal Data. This analysis resulted in an implied per share equity value range for shares of ChampionX common stock of approximately $37.50 to $43.25, rounded to the nearest $0.25. Centerview then compared this range to the Equity Consideration of $40.59 per share of ChampionX common stock implied by the Exchange Ratio and the $55.22 trading price of SLB common stock as of the close of trading on April 1, 2024 to be paid to the holders of shares of ChampionX common stock (other than ChampionX Excluded Stock) pursuant to the Merger Agreement.

Other Factors

Centerview noted for the ChampionX Board the following additional factors solely for reference and informational purposes only:

 

   

Historical Stock Price Trading Analysis. Centerview reviewed historical intraday trading prices of shares of ChampionX common stock during the 52-week period ended April 1, 2024 (the last trading day before the public announcement of the Merger), which reflected low and high stock intraday prices for ChampionX during such period of $24.98 to $38.37 per share of ChampionX common stock.

 

   

Analyst Price Targets Analysis. Centerview reviewed stock price targets for shares of ChampionX common stock in nine publicly available Wall Street research analyst reports as of April 1, 2024 (the last trading day before the public announcement of the Merger) which indicated low and high stock price targets for ChampionX ranging from $32.00 to $40.00 per share of ChampionX common stock.

 

   

Precedent Premiums Paid Analysis. Centerview performed an analysis of premiums paid in (i) all-stock transactions in the last ten years involving U.S. publicly-traded companies with over $1 billion in

 

68


Table of Contents
 

transaction value and stockholders of one party becoming stockholders of less than 25% in the aggregate in the applicable combined company and (ii) all such transactions involving companies in the oil and gas sector. The premiums in this analysis were calculated by comparing the per share acquisition price in each transaction to the closing price of the target company’s common stock for the date one day prior to the date on which the trading price of the target’s common stock was perceived by Centerview to be affected by a potential transaction, which resulted in a median premium for (i) all such transactions of 15.7%, and (ii) all such transactions involving companies in the oil and gas sector of 11.3%. Based on the analysis above and other considerations that Centerview deemed relevant in its professional judgment, Centerview applied a premia range of 10% to 35% with respect to all company premiums and 7% to 16% with respect to oil and gas companies to ChampionX’s closing stock price on April 1, 2024 (the last trading day before the public announcement of the Merger) of $35.40, which resulted in an implied price range of approximately $38.75 to $48.00 and $37.75 to $41.00, respectively, per share of ChampionX common stock, rounded to the nearest $0.25.

General

The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. In arriving at its opinion, Centerview did not draw, in isolation, conclusions from or with regard to any factor or analysis that it considered. Rather, Centerview made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of the analyses.

Centerview’s financial analyses and opinion were only one of many factors taken into consideration by the ChampionX Board in its evaluation of the Merger and the Transactions. Consequently, the analyses described above should not be viewed as determinative of the views of the ChampionX Board or management of ChampionX with respect to the Exchange Ratio, the Equity Consideration or as to whether the ChampionX Board would have been willing to determine that a different consideration was fair. The consideration for the Merger and the Transactions was determined through arm’s-length negotiations between ChampionX and SLB and was approved by the ChampionX Board. Centerview provided advice to ChampionX during these negotiations. Centerview did not, however recommend any specific amount of consideration to ChampionX or the ChampionX Board or that any specific amount of consideration constituted the only appropriate consideration for the Merger and the Transactions.

Centerview is a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the two years prior to the date of its written opinion, except for Centerview’s current engagement, Centerview had not been engaged to provide financial advisory or other services to ChampionX, and did not receive any compensation from ChampionX during such period. In the two years prior to the date of its written opinion, Centerview had not been engaged to provide financial advisory services or other services to SLB, Holdco or Merger Sub, and did not receive any compensation from SLB, Holdco or Merger Sub during such period. Centerview may provide financial advisory and other services to or with respect to ChampionX or SLB or their respective affiliates in the future, for which Centerview may receive compensation. Certain (i) of Centerview’s and its affiliates’ directors, officers, members and employees, or family members of such persons, (ii) of Centerview’s affiliates or related investment funds and (iii) investment funds or other persons in which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade, in debt, equity and other securities or financial instruments (including derivatives, bank loans or other obligations) of, or investments in, ChampionX, SLB, or any of their respective affiliates, or any other party that may be involved in the Merger and the Transactions.

The ChampionX Board selected Centerview as its financial advisor in connection with the Merger based on Centerview’s reputation, experience and knowledge of the oil and gas industry. Centerview is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Merger. In connection with Centerview’s services as the financial advisor to the ChampionX Board, ChampionX has agreed to pay Centerview an aggregate fee of approximately $48 million, $5 million of which was payable upon delivery

 

69


Table of Contents

of its opinion, and the remainder of which is payable contingent upon consummation of the Merger. In addition, ChampionX has agreed to reimburse certain of Centerview’s expenses arising, and to indemnify Centerview against certain liabilities that may arise, out of Centerview’s engagement.

Certain Unaudited Forecasted Financial Information

While ChampionX has from time to time provided limited financial guidance to investors, ChampionX has not, as a matter of course, otherwise publicly disclosed internal projections as to future performance, earnings or other results reflecting an extended period due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, in connection with the ChampionX Board’s evaluation of the Merger and other strategic alternatives, ChampionX’s management prepared and provided to the ChampionX Board and to ChampionX’s financial advisor, Centerview, for its use and reliance in connection with its financial analyses and opinion, certain nonpublic, internal financial projections regarding ChampionX’s future operations, on a standalone basis and excluding the effects of the Merger, for fiscal years ending December 31, 2024 through December 31, 2028 (the “ChampionX Forecast”). The ChampionX Forecast was approved by the ChampionX Board for use by Centerview in connection with the financial analyses presented by Centerview to the ChampionX Board and in Centerview’s opinion, as described under the sections of this proxy statement/prospectus entitled “—Opinion of ChampionX’s Financial Advisor.

In addition, ChampionX’s management made a presentation to SLB, which included forecasts of ChampionX’s revenue, Adjusted EBITDA and Levered Free Cash Flow for the fiscal years ending December 31, 2024 through December 31, 2026 (the “Management Presentation Base Case Forecast”). The financial projections for the line items included in the Management Presentation Base Case Forecast were identical to the same line items presented in the ChampionX Forecast except for certain immaterial differences (i) for the fiscal year ending December 31, 2024 as described under “—ForecastsManagement Presentation Forecasts” and (ii) due to rounding for the fiscal years ending December 31, 2025 and 2026. ChampionX’s management also presented to SLB an illustrative upside forecast of ChampionX’s revenue, Adjusted EBITDA and Levered Free Cash Flow for the fiscal years ending December 31, 2024 through December 31, 2026 based on certain adjustments to the underlying assumptions in the ChampionX Forecast as described under “—ForecastsManagement Presentation Forecasts” (the “Management Presentation Upside Case Forecast” and, together with the Management Presentation Base Case Forecast, the “Management Presentation Forecasts,” the Management Presentation Forecasts together with the ChampionX Forecast, the “Forecasts”). The Management Presentation Forecasts were also provided to the ChampionX Board.

The Forecasts were not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information, but in the view of ChampionX’s management, such projections were prepared on a reasonable basis and reflect the assumptions and estimates available at the time they were prepared. The Forecasts required significant estimates and assumptions that make them inherently less comparable to the similarly titled GAAP measures in ChampionX’s historical GAAP financial statements.

The Forecasts included in this section of the proxy statement/prospectus have been prepared by, and are the responsibility of, ChampionX’s management. PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the Forecasts and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The reports of PricewaterhouseCoopers LLP, incorporated by reference into this proxy statement/prospectus, relate to SLB’s and ChampionX’s previously issued financial statements. They do not extend to the Forecasts and should not be read to do so.

While presented with numeric specificity, the Forecasts reflect assumptions and estimates that were deemed to be reasonable as of the respective dates on which those assumptions and estimates were made but are inherently uncertain. The Forecasts reflect both assumptions as to certain business decisions that are subject to change and,

 

70


Table of Contents

in many respects, subjective judgment, which are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments, including judgments with respect to, among other things, industry performance and competition, general business, economic, regulatory, market and financial conditions, and other future events, and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which ChampionX operates, and the risks and uncertainties described under the sections of this proxy statement/prospectus entitled “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements” and “Where You Can Find More Information.” In addition, the Forecasts may be affected by ChampionX’s ability to achieve strategic goals, objectives and targets over the applicable periods.

Neither ChampionX nor SLB can give any assurance that the Forecasts and the underlying assumptions and estimates will be realized. In addition, since the Forecasts are forward-looking and cover multiple years, such information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the Forecasts to be inaccurate include risks and uncertainties relating to ChampionX’s and SLB’s businesses, industry performance, the regulatory environment, general business and economic conditions and other matters described under the sections of this proxy statement/prospectus entitled “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements” and “Where You Can Find More Information.”

The inclusion of a summary of the Forecasts in this proxy statement/prospectus should not be regarded as an indication that either of ChampionX or SLB or their respective officers, directors, affiliates, advisors or other representatives considered the Forecasts to necessarily be predictive of actual future events, and the Forecasts should not be relied upon as such nor should the information contained in the Forecasts be considered appropriate for other purposes. None of ChampionX, SLB, or their respective officers, directors, affiliates, advisors, or other representatives can give you any assurance that actual results will not differ materially from the ChampionX unaudited prospective financial information. Furthermore, the Forecasts do not take into account any circumstances or events occurring after the date they were prepared. Neither ChampionX nor SLB can give any assurance that, had the Forecasts been prepared either as of the date of the Merger Agreement or as of the date of this proxy statement/prospectus, similar estimates and assumptions would be used. Except as required by applicable securities laws, ChampionX and SLB do not intend to, and disclaim any obligation to, make publicly available any update or other revision to the Forecasts to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, including with respect to the accounting treatment of the Merger under GAAP, or to reflect changes in general economic or industry conditions.

In light of the foregoing, and considering that the ChampionX Special Meeting will be held several months after the Forecasts were prepared, as well as the uncertainties inherent in any forecasted information, ChampionX stockholders are cautioned not to place undue reliance on such information, including while contemplating their vote on the Merger Proposal, Compensation Proposal or the Adjournment Proposal, and you should review ChampionX’s most recent SEC filings for a description of ChampionX’s reported financial results and SLB’s most recent SEC filings for a description of SLB’s reported financial results, as described in the section entitled “Where You Can Find More Information.”

ChampionX is including a summary of the Forecasts below to provide ChampionX stockholders with access to information that the ChampionX Board considered in connection with its evaluation of the Merger.

Forecasts

The following section sets forth a summary of the Forecasts. The Forecasts have not been updated or revised to reflect information or results after the date the Forecasts were prepared or as of the date of this proxy statement/prospectus. In particular, the Forecasts do not reflect ChampionX’s proposed acquisition of RMSpumptools Limited.

 

71


Table of Contents

Adjusted EBITDA, Adjusted EBIT, Levered Free Cash Flow and Unlevered Free Cash Flow included in the Forecasts are “non-GAAP financial measures,” which are financial performance measures that are not calculated in accordance with GAAP. Adjusted EBITDA, Adjusted EBIT, Levered Free Cash Flow and Unlevered Free Cash Flow were utilized by Centerview in connection with its opinion and by the ChampionX Board in connection their evaluation of the Merger. The SEC rules that would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure do not apply to non-GAAP financial measures included in disclosures relating to a proposed business combination such as the Merger if the disclosure is included in a document such as this proxy statement/prospectus. In addition, reconciliations of Adjusted EBITDA, Adjusted EBIT, Levered Free Cash Flow and Unlevered Free Cash Flow were not relied upon by Centerview for purposes of its opinion or by the ChampionX Board in connection with their evaluation of the Merger. Accordingly, ChampionX has not provided a reconciliation of Adjusted EBITDA, Adjusted EBIT, Levered Free Cash Flow or Unlevered Free Cash Flow to the relevant GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and any non-GAAP financial measures as used by ChampionX may not be comparable to similarly titled amounts used by other companies. Furthermore, there are certain limitations in non-GAAP financial measures, because they exclude charges and credits that are required to be included in a GAAP presentation. Accordingly, these non-GAAP financial measures should be considered together with, and not as an alternative to, financial measures prepared in accordance with GAAP.

The ChampionX Forecast

The ChampionX Forecast represents ChampionX’s management’s evaluation of ChampionX’s estimated standalone future financial performance and is based on internal financial analyses that ChampionX has historically used in connection with its strategic planning processes. The ChampionX Forecast was approved by the ChampionX Board for use by Centerview in connection with the financial analyses presented by Centerview to the ChampionX Board and in Centerview’s opinion.

In developing the ChampionX Forecast, ChampionX’s management made numerous assumptions regarding ChampionX’s business, including:

 

   

that West Texas Intermediate oil prices would fall within the range of $65 to $75 for each barrel during the forecast periods;

 

   

that U.S. / North American rig count would remain relatively flat to 2023 levels during the forecast periods;

 

   

that revenue growth at the consolidated ChampionX level would be at mid-single digits, with a 17% growth rate from digital technologies and services as well as higher growth rates within ChampionX’s international operations;

 

   

that incremental gross margin contributions from revenue growth would be 30-35% for ChampionX’s Production Chemical Technologies and Production and Automation Technologies segments and 40-50% for its Drilling Technologies segment;

 

   

that capital expenditures would be 3-3.5% of annual revenues;

 

   

the application of a revenue growth rate of 5% to the projected fiscal year ending December 31, 2026 and incremental gross margin contributions consistent with those in the fiscal years ending December 31, 2024 through 2026, in order to prepare the financial projections for the fiscal year ending December 31, 2027; and

 

   

the application of a revenue growth rate of 2% to the projected fiscal year ending December 31, 2027 and incremental gross margin contributions consistent with those in the fiscal years ending December 31, 2024 through 2026, in order to prepare the financial projections for the fiscal year ending December 31, 2028.

 

72


Table of Contents

A summary of the ChampionX Forecast is presented in the following table, with all figures rounded to the nearest million.

 

     Year ending December 31,  
     2024E      2025E      2026E      2027E      2028E  

Revenue

   $ 4,043      $ 4,325      $ 4,639      $ 4,871      $ 4,969  

Adjusted EBITDA(1)

   $ 845      $ 934      $ 1,030      $ 1,082      $ 1,104  

Adjusted EBIT(2)

   $ 628      $ 727      $ 835      $ 892      $ 925  

Levered Free Cash Flow(3)

   $ 460      $ 545      $ 600      $ 630      $ 643  

Unlevered Free Cash Flow(4)

   $ 458      $ 539      $ 590      $ 621      $ 630  

 

(1)

Adjusted EBITDA is defined as net income (loss) plus (i) depreciation and amortization, (ii) interest expense, net, (iii) foreign currency transaction losses (gains), net and (iv) provision for income taxes.

(2)

Adjusted EBIT is defined as net income (loss) plus (i) interest expense, net, (ii) foreign currency transaction losses (gains), net and (iii) provision for income taxes.

(3)

Levered Free Cash Flow is defined as Adjusted EBITDA less (i) income taxes, (ii) interest expense, (iii) capital expenditures and (iv) changes in net working capital plus (v) stock-based compensation expense.

(4)

Represents a calculation of Unlevered Free Cash Flow prepared by ChampionX management and utilized by Centerview for purposes of its discounted cash flow analyses. Unlevered Free Cash Flow is defined as Adjusted EBITDA less (i) income taxes, (ii) capital expenditures and (iii) changes in net working capital.

The Management Presentation Forecasts

ChampionX’s management presented the Management Presentation Forecasts to SLB.

With respect to the Management Presentation Upside Case Forecast, ChampionX’s management made certain adjustments to the assumptions reflected in the ChampionX Forecast for the fiscal years ending December 31, 2024 through December 31, 2026 to reflect higher industry activity levels and additional Company growth initiatives, which assumptions included:

 

   

that the U.S. / North America rig count would increase by 5% relative to 2023 levels during the forecast periods;

 

   

additional potential upside from revenue growth in Latin America;

 

   

that revenue growth from digital technologies products and services would be 25% during the forecast periods;

 

   

additional potential upside from accelerated growth in international revenue from electrical submersible pumping systems;

 

   

additional potential upside from international growth in Guyana and Saudi Arabia in ChampionX’s Production Chemical Technologies segment;

 

   

additional potential upside from increased customer demand for higher chemical consumption;

 

   

additional potential upside from revenue growth in industrial bearings in the Drilling Technologies segment; and

 

   

that incremental gross margin contributions from revenue growth would be 35% for ChampionX’s Production Chemical Technologies and Production and Automation Technologies segments and 50% for its Drilling Technologies segment.

 

73


Table of Contents

A summary of the Management Presentation Base Case Forecast and the Management Presentation Upside Case Forecast is presented in the following table, with all figures rounded to the nearest million.

 

     Management Presentation
Base Case Forecast(1)
       Management Presentation
Upside Case Forecast
 
     Year ending December 31,           Year ending December 31,  
     2024E      2025E      2026E           2024E      2025E      2026E  

Revenue

   $ 4,011      $ 4,325      $ 4,639          $ 4,122      $ 4,597      $ 5,119  

Adjusted EBITDA(2)

   $ 860      $ 933      $ 1,031          $ 883      $ 1,050      $ 1,238  

Levered Free Cash Flow(3)

   $ 447      $ 544      $ 601          $ 459      $ 627      $ 746  

 

(1)

The financial projection for revenue, Adjusted EBITDA and Levered Free Cash Flow reflected in the Management Presentation Base Case Forecast was identical to the ChampionX Forecast, except for certain immaterial differences arising from (i) assumptions for the fiscal year ending December 31, 2024 relating to ChampionX’s management’s view of certain estimates of near-term operational matters and (ii) rounding for the fiscal years ending December 31, 2025 and 2026.

(2)

Adjusted EBITDA is defined as net income (loss) plus (i) depreciation and amortization, (ii) interest expense, net, (iii) foreign currency transaction losses (gains), net and (iv) provision for income taxes.

(3)

Levered Free Cash Flow is defined as Adjusted EBITDA less (i) income taxes, (ii) interest expense, (iii) capital expenditures and (iv) changes in net working capital plus (v) stock-based compensation expense.

CHAMPIONX AND SLB DO NOT INTEND TO, AND DISCLAIM ANY OBLIGATION TO, UPDATE, CORRECT OR OTHERWISE REVISE THE FORECASTS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE OF THE MERGER AGREEMENT OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FORECASTS ARE NO LONGER APPROPRIATE (EVEN IN THE SHORT TERM).

Interests of ChampionX’s Directors and Executive Officers in the Merger

In considering the recommendation of the ChampionX Board that ChampionX stockholders approve the Merger and vote in favor of the Merger Proposal and the Compensation Proposal, ChampionX stockholders should be aware that the executive officers and directors of ChampionX have certain interests in the Merger that are or may be different from, or in addition to, the interests of ChampionX stockholders generally. The ChampionX Board was aware of these interests and considered them, among other matters, in evaluating and approving the Merger Agreement, and in making its recommendation that ChampionX stockholders adopt the Merger Agreement.

These interests are described in more detail below, and certain of them are quantified in the narrative and the table below. The Merger will be a change in control for purposes of the ChampionX executive compensation plans and agreements described below.

For purposes of this disclosure, the named executive officers of ChampionX are Sivasankaran Somasundaram, President and Chief Executive Officer, Kenneth M. Fisher, Executive Vice President and Chief Financial Officer, Deric Bryant, Chief Operating Officer and President, Chemical Technologies, Paul E. Mahoney, President, Production & Automation Technologies and Julia Wright, Senior Vice President, General Counsel and Secretary.

Treatment of ChampionX Equity Awards in the Merger

Under the terms of the Merger Agreement, at the Effective Time, and by virtue of the Merger and without any action on the part of SLB, Holdco, Merger Sub and ChampionX or the holders thereof:

 

(a)

each ChampionX SAR (whether vested or unvested) that is outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive, within 10 business days following the closing, an amount in cash equal to the product of (1) the number of shares of ChampionX common stock

 

74


Table of Contents
  underlying such ChampionX SAR multiplied by (2) the excess, if any, of the ChampionX Closing Price over the exercise or reference price of such ChampionX SAR. If the product of clauses (1) and (2) in the foregoing sentence is not greater than zero, at the Effective Time such ChampionX SAR will automatically be cancelled for no consideration;

 

(b)

each ChampionX Option that is outstanding immediately prior to the Effective Time will automatically be converted into an SLB Option with respect to that number of shares of SLB common stock that is equal to (i) the product of (A) the number of shares of ChampionX common stock underlying such ChampionX Option as of immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole number, at an exercise price per share equal to the quotient obtained by (x) dividing (i) the per share exercise price of the ChampionX Option by (ii) the Exchange Ratio, (y) rounded up to the nearest whole cent, provided, however, that the exercise price and the number of shares of SLB common stock covered by such SLB Option will be determined in a manner that is intended to be consistent with the requirements of Section 409A of the Code. Each SLB Option will otherwise continue to have, and will be subject to, the same terms and conditions as applied to the ChampionX Option immediately prior to the Effective Time;

 

(c)

each ChampionX RSU that is outstanding immediately prior to the Effective Time will be assumed and converted into an SLB RSU Award, which will have, and be subject to, the same terms and conditions as applied to the ChampionX RSU Award immediately prior to the Effective Time, except that, (x) the number of shares of SLB common stock subject to the SLB RSU Award will equal (i) the product of (A) the number of shares of ChampionX common stock underlying such ChampionX RSU Award multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share, (y) each SLB RSU Award will vest in full if, following the Effective Time, the holder thereof incurs a qualifying termination of employment by SLB or its subsidiaries at any time that such SLB RSU Award remains outstanding (and, solely in the case of a qualifying termination that occurs more than 18 months following the closing date, subject to the holder timely executing (and not revoking) a general release of claims in a form provided by SLB or one of its subsidiaries), and (z) SLB RSU Awards will not be entitled to receive any dividend equivalent rights with respect to any dividends declared or accrued following the Effective Time. At the Effective Time, each ChampionX DER (whether vested or unvested) will be cancelled and converted into the right to receive within 10 business days following the closing date, an amount in cash equal to the ChampionX Pre-Closing Dividend Amount;

 

(d)

each ChampionX Performance Share Award that is outstanding immediately prior to the Effective Time will be assumed and converted into an SLB RSU Award, which will have, and be subject to, the same terms and conditions as applied to the ChampionX Performance Share Award immediately prior to the Effective Time, except that, (x) the number of shares of SLB common stock subject to the SLB RSU Award will equal (i) the product of (A) a number of shares of ChampionX common stock underlying such ChampionX Performance Share Award determined based on such award’s Applicable Performance Level by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share, (y) each such SLB RSU Award will vest in full if, following the Effective Time, the holder thereof incurs a qualifying termination (and, solely in the case of a qualifying termination that occurs more than 18 months following the closing date, subject to the holder timely executing (and not revoking) a general release of claims in a form provided by SLB or one of its subsidiaries), and (z) SLB RSU Awards will not be subject to any performance-based vesting conditions, which will be deemed achieved at the Applicable Performance Level; and

 

(e)

each ChampionX DSU that is outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive, within 10 business days following the closing date, a number of shares of SLB common stock equal to (i) the product of (A) the number of shares of ChampionX common stock underlying the ChampionX DSU Award multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share.

Under the terms of the ChampionX Equity Plan, all unvested awards held by the eligible executive officers of ChampionX will become vested and will be settled upon a Qualifying Termination (as defined below) (i.e.,

 

75


Table of Contents

“double-trigger” vesting). See the section entitled “—Summary of Payments and Benefits to ChampionX’s Named Executive Officers” below for the estimated amount that would be payable to each ChampionX named executive officer in respect of payout of their ChampionX SARs and ChampionX DSUs in connection with the Merger and accelerated vesting of other unvested ChampionX Equity Awards in connection with a Qualifying Termination.

In addition, based on the same assumptions as described in such section, (x) the aggregate estimated amount that would be payable to the three ChampionX executive officers who are not named executive officers in respect of the payout of their ChampionX SARs in connection with the Merger is $331,134 and in respect of the accelerated vesting of their other unvested ChampionX Equity Awards is $6,945,920, of which (i) $2,534,531 is payable in respect of ChampionX RSUs (including the associated payments in connection with ChampionX DERs), and (ii) $4,411,389 is payable in respect of ChampionX Performance Shares; and (y) the estimated amounts that would be payable to each current non-employee director of ChampionX in respect of the payout of their ChampionX DSU Awards (including ChampionX DSU Awards issuable in connection with the termination of their service under the terms of the ChampionX Equity Plan) in connection with the Merger are as follows: Daniel Rabun, $1,179,288; Heidi Alderman, $590,090; Mamatha Chamarthi, $1,179,288; Carlos Fierro, $196,350; Gary Luquette, $1,179,288; Elaine Pickle, $196,350; Stuart Porter, $590,090; and Stephen Todd, $1,009,883. In addition, the number of SLB Options that will be held by the ChampionX executive officers as a result of the conversion of their ChampionX Options into SLB Options in connection with the Merger will be as follows: for Mr. Bryant, 568,213 SLB Options, and for one ChampionX executive officer who is not a named executive officer, 157,652 SLB Options.

Change-in-Control Severance Plan

Each of the ChampionX executive officers (including each ChampionX named executive officer) participates in the ChampionX Corporation Amended and Restated Senior Executive Change-in-Control Severance Plan (“CIC Severance Plan”). Under the CIC Severance Plan, in the event that a ChampionX executive officer’s employment is terminated without “cause” or they resign for “good reason,” in each case within eighteen months following a change in control (“Qualifying Termination”), the executive officer would be eligible for the following compensation and benefits: (i) a lump sum payment equal to 2.5 (or for Mr. Somasundaram, 3.0) multiplied by the sum of (a) the executive officer’s annual base salary, and (b) the executive officer’s target annual incentive bonus, each measured on the termination date, or if higher, on the date of the change in control; (ii) a lump sum payment equal to the executive officer’s pro-rata target annual cash bonus for the year of termination or if higher, on the date of the change in control; and (iii) a lump sum payment equal to the then premium cost of COBRA health continuation coverage for eighteen months.

Payments under the CIC Severance Plan are conditioned upon the ChampionX executive officer timely executing a general release in favor of ChampionX and continued compliance with applicable restrictive covenants. The Merger will constitute a change in control for purposes of the CIC Severance Plan.

See the section entitled “—Summary of Payments and Benefits to ChampionX’s Named Executive Officers” below for the estimated change in control severance amounts for each ChampionX named executive officer. In addition, based on the same assumptions as described in such section, the aggregate estimated cash severance (excluding prorated bonus) that would be payable to the three ChampionX executive officers who are not named executive officers is $5,182,768.

Based on the same assumptions as described in the section entitled "—Summary of Payments and Benefits to ChampionX’s Named Executive Officers", in addition to the ChampionX DSU Awards issuable in connection with the termination of their service, the current non-employee directors of ChampionX shall be eligible to receive a pro-rata portion of their annual cash retainer ($112,500, or for the non-executive chairperson of the board, $125,000) based on the number of full calendar quarters that such individual served as a director of ChampionX as follows: Dan Rabun, $126,250; Heidi Alderman, $61,250; Mamatha Chamarthi, $61,250; Carlos Fierro, $61,250; Gary Luquette, $66,250; Elaine Pickle, $61,250; Stuart Porter, $58,750; and Stephen Todd, $68,750.

 

76


Table of Contents

Deferred Compensation Plan

Under the Apergy USA LLC Executive Deferred Compensation Plan (“DC Plan”), in the event of a change in control, the participants in the DC Plan will receive a lump sum distribution of their account balance, which is fully vested at all times, within sixty days following the change in control. The Merger will constitute a change in

control for purposes of the DC Plan. Mr. Somasundaram is the only executive officer who is a participant in the DC Plan. See the section entitled “—Summary of Payments and Benefits to ChampionX’s Named Executive Officers” below for the amounts payable under the DC Plan to Mr. Somasundaram.

Mirror Savings Plan

Under the ChampionX Mirror Savings Plan (“Mirror Plan”), in the event of a change in control, ChampionX will be required to establish an irrevocable trust for purposes of funding the vested accounts of each participant under the Mirror Plan. The terms of the Mirror Plan do not provide for acceleration of any payments or benefits upon a change in control (including the Merger). Mr. Bryant is the only named executive officer who is a participant in the Mirror Plan. The vested account balance under the Mirror Plan held by Mr. Bryant as of April 21, 2024 is $380,521. The aggregate current account balance under the Mirror Plan held by one ChampionX executive officer who is not a named executive officer as of April 21, 2024 is $122,413.

Annual Bonus for the Year of Closing

The Merger Agreement provides that on or about the Closing Date, ChampionX may pay to each individual who is employed by ChampionX or a subsidiary immediately before the Effective Time (including each ChampionX executive officer) a prorated annual cash bonus equal to the employee’s annual cash bonus opportunity for the year in which the closing of the Merger occurs, based on the greater of (a) actual performance as measured as of the Effective Time and (b) target performance, and prorated to reflect the portion of the year elapsed prior to the closing date. The annualized 2024 target bonus levels for the executive officers are as follows: Mr. Somasundaram, $1,192,788; Mr. Fisher, $586,788; Mr. Bryant, $523,332; Mr. Mahoney, $384,038; Ms. Wright, $363,462; and the three ChampionX executive officers who are not named executive officers, $794,469 (in the aggregate). See the section entitled “—Summary of Payments and Benefits to ChampionX’s Named Executive Officers” below for the estimated prorated bonus that would be payable to each ChampionX named executive officer. In addition, based on the same assumptions as described in such section, the aggregate estimated prorated bonus that would be payable to the three ChampionX executive officers who are not named executive officers is $270,481.

Retention Program

The Merger Agreement provides that prior to the closing date, ChampionX may establish a cash-based retention program in the aggregate amount of up to $60 million (inclusive of employer-side payroll and similar taxes) to promote retention and to incentivize efforts to consummate the Merger and to ensure a successful and efficient integration process. Allocations from this program may be made to any employee of ChampionX (including its executive officers, subject to a maximum of $10 million, inclusive of employer-side payroll and similar taxes). Any allocation from this program to ChampionX employees will be determined at the sole discretion of SLB, following consultation with the Chief Executive Officer of ChampionX or his designee. As of the date of this proxy statement/prospectus, there are no agreements or arrangements regarding allocation of awards under the retention program to any of the ChampionX executive officers.

2025 Annual ChampionX Equity Awards

To the extent closing of the Merger has not occurred by February 1, 2025, ChampionX may grant ChampionX RSU Awards and ChampionX Performance Share Awards to its employees (including its executive officers) in the ordinary course of business, with a maximum aggregate grant value of $25.6 million. These awards will have the same terms and conditions as applicable to the ChampionX RSU Awards and ChampionX Performance Share Awards granted in February 2024, except that ChampionX may elect to grant ChampionX RSU Awards in lieu of

 

77


Table of Contents

ChampionX Performance Share Awards, provided that such ChampionX RSU Awards will have the same dollar-denominated value as the ChampionX Performance Share Awards. Such awards will be converted into SLB RSU Awards at the closing of the Merger, as discussed in the section entitled “—Treatment of ChampionX Equity Awards” above. As of the date of this proxy statement/prospectus, ChampionX has not determined whether and to what extent ChampionX RSU Awards and ChampionX Performance Share Awards will be granted to its employees, including its executive officers.

Other Compensation Matters

In addition to the payments and benefits above, under the terms of the Merger Agreement, ChampionX may take certain compensation actions prior to the completion of the Merger that will affect ChampionX’s directors and executive officers, although determinations related to such actions have not been made as of the date of this proxy statement/prospectus and the impact of such actions is not reflected in the amounts estimated above. Among other actions, ChampionX may increase annual base salary and target annual cash bonus opportunity in connection with promotions in the ordinary course of business and consistent with past practice and market-levels of compensation for its employees. Any such increases for ChampionX executive officers would be subject to the approval of the Chief Executive Officer of SLB.

No New Management Arrangements

As of the date of this proxy statement/prospectus, neither ChampionX nor SLB has entered into any agreements, arrangements or understandings with ChampionX’s executive officers in connection with their employment following the consummation of the Merger.

No Section 280G Golden Parachute Excise Tax Gross-Ups

No ChampionX plan, policy, agreement or arrangement provides any employee, officer or director with the right to a tax “gross-up” payment in connection with any “golden parachute” or other tax liability triggered in connection with the Merger.

Summary of Payments and Benefits to ChampionX’s Named Executive Officers

This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation of each of ChampionX’s named executive officers, that is based on or otherwise relates to the Merger and that will or may become payable to the ChampionX named executive officers at the completion of the Merger or on a Qualifying Termination of employment upon or following the consummation of the Merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules, and in this section such term is used to describe the Merger-related compensation payable to the ChampionX named executive officers. The “golden parachute” compensation payable to these individuals is subject to a non-binding advisory vote of ChampionX stockholders. For information regarding the non-binding advisory vote on compensation, please see the section of this proxy statement/prospectus entitled “The ChampionX Special Meeting—Proposal 2: The Compensation Proposal.”

Except as otherwise specifically noted, the disclosure below uses the following assumptions: (i) the Effective Time occurred on April 21, 2024; (ii) each executive officer of ChampionX experienced a Qualifying Termination on April 21, 2024; (iii) each executive officer’s base salary rate and annual target bonus remain unchanged from that in effect as of the date of this proxy statement/prospectus; (iv) there is no vesting of ChampionX Equity Awards between the date hereof and the Effective Time; (v) the per share price of ChampionX common stock of $40.12 (which is calculated by multiplying the Exchange Ratio by $54.58, the average closing price of a share of SLB common stock over the first five business days following the first public announcement of the Merger); (vi) estimate of actual performance through the Effective Time for purposes of ChampionX Performance Share Awards with a performance period commencing as of January 1, 2022, is 200% of target performance (i.e., maximum performance); and (vii) estimate of actual performance through the Effective Time for purposes of payment of prorated annual bonus for the year in which the Effective Time occurs, payable under the terms of the Merger Agreement, is 100% of target performance.

 

78


Table of Contents

Some of the assumptions used in the table below are based upon information not currently available and, as a result, the actual amounts to be received by any of the individuals below may materially differ from the amounts set forth below.

 

Named Executive Officer

   Cash(1)
($)
     Equity(2)
($)
     DC Plan(3)      Benefits(4)
($)
     Total
($)
 

Mr. Somasundaram

   $ 6,917,837      $ 25,307,186      $ 1,637,320      $ 33,088      $ 33,895,431  

Mr. Fisher

   $ 3,321,502      $ 9,543,884        —       $ 24,090      $ 12,889,476  

Mr. Bryant

   $ 3,144,920      $ 7,179,351        —       $ 32,880      $ 10,357,151  

Mr. Mahoney

   $ 2,398,988      $ 4,938,019        —       $ 33,088      $ 7,370,095  

Ms. Wright

   $ 2,266,923      $ 4,293,437        —       $ 10,693      $ 6,571,053  

 

(1)

Cash. Amounts shown reflect: (a) cash severance payments under the CIC Severance Plan, consisting of a lump sum payment equal to 2.5 (or for Mr. Somasundaram, 3.0) multiplied by the sum of (i) the named executive officer’s annual base salary and the named executive officer’s target annual incentive bonus, each measured on April 21, 2024, in each case, payable pursuant to the CIC Severance Plan. Payments under the CIC Severance Plan are considered to be “double trigger” payments, which means that both a change in control, such as the Merger, and another event (i.e., a Qualifying Termination) must occur prior to such payments being provided to the named executive officer (see the section entitled “—Change-in-Control Severance Plan” above); and (b) a prorated annual cash bonus for 2024, payable under the terms of the Merger Agreement. The estimated amount of each such cash payment is set forth in the table below:

 

Named Executive Officer

   Cash
Severance

($)
     Prorated
Bonus
($)
 

Mr. Somasundaram

   $ 6,513,750      $ 404,087  

Mr. Fisher

   $ 3,121,415      $ 200,087  

Mr. Bryant

   $ 2,966,400      $ 178,520  

Mr. Mahoney

   $ 2,269,313      $ 129,675  

Ms. Wright

   $ 2,143,750      $ 123,173  

 

(2)

Equity. Set forth below are: (a) the value that each ChampionX named executive officer would receive in respect of the ChampionX SARs, under the terms of the Merger Agreement; (b) the value that each named executive officer would receive in respect of accrued ChampionX DERs in connection with ChampionX RSU Awards, under the terms of the Merger Agreement; (c) estimated amount that would be payable to Mr. Fisher (as a former non-employee director of ChampionX) in respect of the ChampionX DSUs in connection with the Merger; and (d) the values of each other type of unvested ChampionX Equity Award (in the form of converted SLB RSU Awards) that would vest and become payable assuming that the Merger was consummated and each named executive officer experienced a Qualifying Termination within eighteen months following the consummation of the Merger, under the terms of the ChampionX Equity Plan (as described above, all unvested awards held by the named executive officers will become vested and will be settled upon a Qualifying Termination (i.e., “double-trigger” vesting)):

 

Named Executive Officer

   ChampionX
SARs

($)
     ChampionX
DERs

($)
     ChampionX
DSU

($)
     ChampionX
RSU Awards

($)
     ChampionX
Performance
Share Awards

($)
 

Mr. Somasundaram

   $ 266,151      $ 60,816        N/A      $ 7,234,814      $ 17,745,405  

Mr. Fisher

     N/A      $ 37,755      $ 589,198      $ 3,309,675      $ 5,607,256  

Mr. Bryant

     N/A      $ 33,394        N/A      $ 2,782,146      $ 4,363,811  

Mr. Mahoney

   $ 515,713      $ 17,055        N/A      $ 1,580,261      $ 2,824,990  

Ms. Wright

     N/A      $ 15,154        N/A      $ 1,472,188      $ 2,806,095  

 

(3)

Deferred Compensation Plan. Upon a change in control, Mr. Somasundaram will receive a lump sum payment of his fully vested account balance under the DC Plan under the terms thereof.

(4)

Benefits. The amounts shown reflect the estimated value of payments or reimbursements to which each ChampionX named executive would be entitled upon a Qualifying Termination of employment under the

 

79


Table of Contents
  CIC Severance Plan (i.e. “double-trigger” payments), including COBRA health continuation coverage. The estimated value of such benefits is shown in the following table:

 

Named Executive Officer

   Benefits
($)
 

Mr. Somasundaram

   $ 33,088  

Mr. Fisher

   $ 24,090  

Mr. Bryant

   $ 32,880  

Mr. Mahoney

   $ 33,088  

Ms. Wright

   $ 10,693  

Indemnification and Insurance

The Merger Agreement provides that the directors and officers of ChampionX and its subsidiaries will have the right to indemnification and continued coverage under directors’ and officers’ liability insurance policies for at least six years following the Effective Time. Please see “The Merger Agreement —Indemnification and Insurance.

Appraisal Rights

Under Delaware law (with respect to ChampionX stockholders) and the laws of Curaçao (with respect to SLB shareholders), neither ChampionX stockholders nor SLB shareholders will be entitled to appraisal rights or dissenters’ rights in connection with the Merger, the issuance of shares of SLB common stock in connection with the Merger, or the Transactions.

Restrictions on Sales of Shares of SLB Common Stock Received in the Merger

Shares of SLB common stock issued and delivered in the Merger will not be subject to any restrictions on transfer arising under the Securities Act or the Exchange Act, except shares of SLB common stock issued and delivered to any ChampionX stockholder who may be deemed to be an “affiliate” of SLB after the completion of the Merger. This proxy statement/prospectus does not cover resales of SLB common stock received by any person upon the completion of the Merger, and no person is authorized to make any use of this proxy statement/prospectus in connection with any resale.

Accounting Treatment

The Merger will be accounted for as an acquisition of a business. SLB will record net tangible and identifiable intangible assets acquired and liabilities assumed from ChampionX at their respective fair values at the date of the completion of the Merger. Any excess of the purchase price, over the fair value of the identifiable net assets of ChampionX, will be recorded as goodwill.

The financial condition and results of operations of SLB after completion of the Merger will reflect ChampionX’s balances and results after completion of the Merger but will not be restated retroactively to reflect the historical financial condition or results of operations of ChampionX. SLB’s earnings following the completion of the Merger will reflect acquisition accounting adjustments, including the effect of changes in the carrying value for assets and liabilities on depreciation and amortization expense.

Material U.S. Federal Income Tax Consequences

The following is a discussion of the material U.S. federal income tax consequences to Holders (as defined below) of (1) the exchange of their ChampionX common stock for SLB common stock in the Merger and (2) the ownership and disposition of SLB common stock received in the Merger. This discussion is based on the Code, existing and proposed Treasury regulations (the “Treasury Regulations”) promulgated under the Code, judicial

 

80


Table of Contents

decisions, published rulings, administrative pronouncements, and all other applicable authorities, all as in effect on the date of this proxy statement/prospectus and all of which are subject to change, possibly with retroactive effect. This discussion does not address any aspects of state, local, or non-U.S. laws or federal laws other than those relating to U.S. federal income taxation, is not a complete analysis or description of all of the possible tax consequences of the Merger or of the ownership or disposition of shares of SLB common stock, and does not address all tax considerations that may be relevant to a Holder in light of such Holder’s particular circumstances. No rulings are intended to be sought from the Internal Revenue Service (the “IRS”) with respect to the Merger, and there can be no assurance that the IRS or a court will not take a contrary position regarding the tax consequences described herein. This discussion addresses only Holders that own their shares of ChampionX common stock and will own their shares of SLB common stock as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment purposes). This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a Holder in light of such Holder’s particular circumstances, including any tax consequences arising under the unearned income Medicare contribution tax, or to a Holder that is subject to special treatment under U.S. federal income tax law, including, for example:

 

   

a bank or other financial institution;

 

   

a tax-exempt entity;

 

   

an insurance company;

 

   

a person holding shares as part of a straddle, hedge, constructive sale, integrated transaction, or conversion transaction;

 

   

an S corporation or other pass-through entity;

 

   

a U.S. expatriate;

 

   

a person who is liable for the alternative minimum tax;

 

   

a broker-dealer or trader in securities;

 

   

a U.S. Holder (as defined below) whose functional currency is not the U.S. dollar;

 

   

a regulated investment company;

 

   

a real estate investment trust;

 

   

a trader in securities who has elected the mark-to-market method of accounting for its securities;

 

   

any person that, at any time after the Merger, owns, actually and/or constructively, 10% or more of the total combined voting power of all classes of stock entitled to vote of SLB; and

 

   

a person who received ChampionX common stock through the exercise of employee stock options, through a tax qualified retirement plan, or otherwise as compensation.

For purposes of this discussion, a “U.S. Holder” is any beneficial owner of ChampionX common stock or, after the completion of the Merger, SLB common stock that, for U.S. federal income tax purposes, is:

 

   

an individual citizen or resident alien of the United States;

 

   

a corporation or other entity taxable as a corporation organized under the laws of the United States, any state thereof, or the District of Columbia;

 

   

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

 

   

a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons has the authority to control all substantial decisions of the trust or (2) it has a valid election in place under applicable Treasury regulations to be treated as a U.S. person.

 

81


Table of Contents

A “Non-U.S. Holder” is any beneficial owner of ChampionX common stock or, after the completion of the Merger, SLB common stock that, for U.S. federal income tax purposes, is an individual, corporation, estate, or trust that is not a U.S. Holder.

As used in this discussion, a “Holder” means a U.S. Holder, a Non-U.S. Holder, or both, as the context may require.

If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds ChampionX common stock or SLB common stock, the tax treatment of a partner in that partnership generally will depend on the status of the partner and the activities of the partnership. If you are a partner in a partnership that holds ChampionX common stock or SLB common stock, you are urged to consult your tax advisor regarding the U.S. federal income tax consequences to you of the Merger and the ownership and disposition of SLB common stock received in the Merger.

ALL HOLDERS OF CHAMPIONX COMMON STOCK ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR FEDERAL, STATE, LOCAL, AND NON-U.S. TAX CONSEQUENCES TO THEM OF THE MERGER AND THE OWNERSHIP AND DISPOSITION OF SLB COMMON STOCK RECEIVED IN THE MERGER.

The Merger

General Tax Consequences to U.S. Holders

The exchange of ChampionX common stock for SLB common stock in the Merger will be a taxable transaction for U.S. federal income tax purposes. Therefore, subject to the discussion below relating to the potential application of Section 304 of the Code, a U.S. Holder will recognize capital gain or loss equal to the difference, if any, between (1) the sum of the fair market value of SLB common stock received by such Holder in the Merger and any cash received in lieu of fractional shares of ChampionX common stock, and (2) the U.S. Holder’s adjusted tax basis in its ChampionX common stock. A U.S. Holder’s adjusted tax basis in its ChampionX common stock will generally equal the Holder’s purchase price for such stock. ChampionX stockholders will receive no cash consideration, other than cash in lieu of fractional shares of SLB common stock, with which to pay any potential tax liability resulting from the Merger.

Capital gains of a non-corporate U.S. Holder will be eligible for the preferential U.S. federal income tax rates applicable to long-term capital gains if the U.S. Holder has held its ChampionX common stock for more than one year as of the date of the Merger. The deductibility of capital losses is subject to limitations. If a U.S. Holder acquired different blocks of shares of ChampionX common stock at different times or different prices, the U.S. Holder must determine its tax basis and holding period separately for each block of ChampionX common stock.

A U.S. Holder’s aggregate tax basis in SLB common stock received in the Merger will equal the fair market value of such stock as of the date of the Merger. A U.S. Holder’s holding period in SLB common stock received in the Merger will begin the day after the Merger.

General Tax Consequences to Non-U.S. Holders

Subject to the potential application of Section 304 of the Code discussed below, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain recognized on the exchange of ChampionX common stock for SLB common stock in the Merger unless:

 

   

the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if an income tax treaty applies, is attributable to a U.S. permanent establishment of the Non-U.S. Holder);

 

   

the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year that includes the Merger and certain other conditions are satisfied; or

 

82


Table of Contents
   

ChampionX is or has been a United States real property holding corporation, which we refer to as a USRPHC, at any relevant time within the shorter of the five-year period preceding the Merger or the Non-U.S. Holder’s holding period, and the Non-U.S. Holder holds, or has held at any time during such period, more than 5% of the ChampionX common stock.

If the Non-U.S. Holder’s gain is described in the first bullet, then the Non-U.S. Holder will generally be subject to U.S. federal income tax under the rules described above as if it were a U.S. Holder of ChampionX common stock and, in the case of a foreign corporation, may be subject to an additional “branch profits tax” at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty).

If the Non-U.S. Holder is described in the second bullet, then such Non-U.S. Holder will be subject to U.S. federal income tax at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty) on the gain, which may be offset by certain U.S. source capital losses of the Non-U.S. Holder.

Regarding the third bullet, ChampionX does not believe that it is or has been a USRPHC within the past five years.

In any event, ChampionX stockholders will receive no cash consideration, other than cash in lieu of fractional shares of SLB common stock, with which to pay any potential tax liability resulting from the Merger.

Potential Application of Section 304 of the Code to the Merger

If Section 304 of the Code applies to the Merger, a Holder may be subject to U.S. federal income tax treatment that differs materially from that described above. Section 304 of the Code will apply to the Merger if holders of shares of ChampionX common stock, taken together, own (actually or constructively under attribution rules set forth in the Code) 50% or more of SLB, by vote or value, following the completion of the Merger, taking into account both shares of SLB common stock received in the Merger and shares of SLB common stock held at the time of the Merger. It may not be possible to establish with certainty following the closing of the Merger whether or not Section 304 of the Code applied to the Merger because the ownership information (including constructive ownership) necessary to make such determination may not be available. Based on the limited ownership information that is publicly available, it is possible that Section 304 of the Code could apply to the Merger.

All Holders of shares of ChampionX common stock that also own (including by attribution) shares of SLB common stock should consult their own tax advisors, including with respect to any actions that may be taken to mitigate the potential application of Section 304 of the Code.

If Section 304 of the Code applies to the Merger, the SLB common stock received by a Holder would be treated as the proceeds of a redemption of stock deemed issued by the indirect subsidiary of SLB. This deemed redemption would be treated as a distribution, unless the deemed redemption is “substantially disproportionate” or “not essentially equivalent to a dividend” with respect to a particular Holder, in which case the deemed redemption would be treated as a sale or exchange of shares. As a result, instead of recognizing taxable gain or loss as described above, a Holder of ChampionX common stock whose percentage ownership interest in ChampionX immediately after the Merger (including indirectly as a result of owning stock in SLB and taking into account any shares of SLB stock actually and constructively owned by such Holder prior to the Merger or otherwise acquired in connection with the Merger) is not lower than its percentage ownership interest in ChampionX prior to the Merger by an amount that satisfies certain tests may recognize dividend income in an amount up to the fair market value of the shares of SLB common stock received by such Holder in the Merger.

Whether the deemed redemption is treated as a distribution with respect to a Holder will depend upon the Holder’s particular circumstances. Under IRS published guidance, for a Holder who has a minimal percentage stock interest in ChampionX and who exercises no control over corporate affairs, such a Holder’s consideration received in the Merger would not be treated as a distribution so long as that holder experiences any reduction in

 

83


Table of Contents

its percentage stock interest, determined by comparing that holder’s percentage of ChampionX stock actually and constructively owned by that holder immediately prior to the Merger with the percentage of stock of ChampionX that is constructively owned (through actual and constructive ownership of SLB stock) immediately following the Merger. In that situation the receipt of SLB common stock in exchange for ChampionX common stock pursuant to the Merger would not be treated as a distribution but would instead be taxable as a sale or exchange with respect to such Holder, with the consequences to U.S. Holders and Non-U.S. Holders are described under “—General Tax Consequences to U.S. Holders” and “—General Tax Consequences to Non-U.S. Holders,” as applicable.

For a Holder that does not experience a reduction in its percentage stock interest as described above, if Section 304 does apply to the Merger such Holder’s consideration received in the Merger would be treated as a distribution. A distribution under Section 304 of the Code would be taxable as a dividend to a Holder to the extent of such Holder’s allocable share of the relevant current or accumulated earnings and profits, as described further below.

Holders who hold a material percentage of the outstanding ChampionX common stock, or who exercise managerial control over its corporate affairs, are subject to different rules that require a more significant reduction in percentage stock interest to avoid distribution treatment if Section 304 of the Code applies to the Merger. Any such Holders are urged to consult their own tax advisors regarding the potential application of Section 304 of the Code to the Merger in light of their particular circumstances.

For U.S. Holders, dividends are generally taxable as ordinary income. However, while there is no controlling authority, assuming certain holding period requirements are satisfied, a reduced U.S. federal income tax rate should be available for a dividend that a non-corporate U.S. Holder is deemed to receive under Section 304 of the Code. To the extent that a corporate U.S. Holder of ChampionX common stock is treated as having received a dividend as a result of Section 304 of the Code, such dividend may be eligible for a dividends received deduction (subject to certain requirements and limitations) and may be subject to the “extraordinary dividend” provisions of the Code.

The portion of any deemed distribution not paid out of the relevant current or accumulated earnings and profits would be applied against such U.S. Holder’s adjusted tax basis in its ChampionX common stock and thereafter would be treated as gain from the sale of such U.S. Holder’s ChampionX common stock.

For Non-U.S. Holders, the receipt of any amounts treated as a dividend generally will be subject to U.S. withholding tax at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty), unless such dividend is effectively connected with a Non-U.S. Holder’s conduct of a trade or business within the United States (and, if an applicable income tax treaty so requires, is attributable to a U.S. permanent establishment or fixed place of business of the Non-U.S. Holder). However, because application of Section 304 of the Code to the Merger is uncertain and because the application of Section 304 of the Code depends on a Holder’s particular circumstances, a withholding agent may not be able to determine whether a Holder is treated as receiving a dividend for U.S. federal income tax purposes. Therefore, a withholding agent may withhold tax at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty) on the full amount of the SLB common stock payable to a Non-U.S. Holder unless (1) the withholding agent has established special procedures allowing Non-U.S. Holders to certify that they are exempt from such withholding tax and (2) the Non-U.S. Holder is able to certify that the Non-U.S. Holder meets the requirements of such exemption (e.g., because the Non-U.S. Holder is not treated as receiving a dividend under the Section 302 tests described above). SLB and ChampionX intend to make available ownership certification forms that a Non-U.S. Holder may submit to a withholding agent as part of the letter of transmittal to establish non-dividend treatment. However, there can be no assurance that a withholding agent will establish or otherwise implement such special certification procedures. If a withholding agent determines it is required to withhold with respect to a Non-U.S. Holder, the withholding agent may retain and sell or cause to be sold the amount of SLB common stock otherwise payable to such Non-U.S. Holder as is necessary to satisfy any withholding with respect to such Non-U.S. Holder. In order to obtain a reduced rate of withholding under a tax treaty, a Non-U.S. Holder claiming such a reduced rate will be required to deliver a

 

84


Table of Contents

properly completed IRS Form W-8BEN or W-8BEN-E (or other applicable form) to the applicable withholding agent. In the event a withholding agent withholds excess amounts from the SLB common stock payable to a Non-U.S. Holder, the Non-U.S. Holder may generally obtain a refund of any such excess amounts by timely filing an appropriate claim with the IRS.

Section 304 of the Code and the Treasury regulations and guidance thereunder are complex. Any Holder that actually or constructively owns, or expects to own at the time of the Merger, both shares of ChampionX common stock and shares of SLB common stock should consult its own tax advisors with respect to the application of Section 304 of the Code in its particular circumstances (including as to its tax basis in the shares subject to Section 304 of the Code). In addition, all Non-U.S. Holders should consult their own tax advisors regarding their particular facts and circumstances, the procedures for claiming treaty benefits or otherwise establishing an exemption from U.S. withholding tax with respect to the SLB common stock payable to them pursuant to the Merger, and any actions that may be taken to mitigate any potential adverse tax consequences.

Information Reporting and Backup Withholding

SLB common stock received by a U.S. Holder or a Non-U.S. Holder in the Merger, under certain circumstances, may be subject to information reporting and backup withholding (currently at a 24% rate), unless such Holder provides proof of an applicable exemption or furnishes its taxpayer identification number and otherwise complies with all applicable requirements under the backup withholding rules. Any amounts withheld under the backup withholding rules are not additional tax and may be allowed as a refund or credit against the Holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.

Ownership and Disposition of SLB Common Stock Received in the Merger

The following is a discussion of the U.S. federal income tax consequences of the ownership and disposition by U.S. Holders and Non-U.S. Holders of SLB common stock received in the Merger.

U.S. Holders

Distributions

Subject to the discussion below under Passive Foreign Investment Company Considerations,” distributions, if any, made with respect to shares of SLB common stock will constitute dividends for U.S. federal income tax purposes to the extent of SLB’s current-year or accumulated earnings and profits as determined for U.S. federal income tax purposes. The gross amount of dividends that a U.S. Holder receives generally will be subject to U.S. federal income taxation as dividend income and will not be eligible for the dividends-received deduction generally allowed to U.S. corporations. Subject to exceptions for short-term or hedged positions, non-corporate U.S. Holders will be subject to U.S. federal income taxation at reduced rates with respect to “qualified dividends.” Dividends paid by SLB on shares of SLB common stock will be treated as “qualified dividends” as long as (1) the SLB common stock is readily tradable on the NYSE and (2) SLB was not, in its taxable year prior to the year in which the dividend is paid, and is not, in its taxable year in which the dividend is paid, a passive foreign investment company, which we refer to as a PFIC. As described below, SLB believes that it has not been a PFIC in any prior year, will not be a PFIC for the taxable year in which the Merger occurs, and will not become a PFIC in the future.

To the extent that a distribution exceeds SLB’s current-year and accumulated earnings and profits as determined for U.S. federal income tax purposes, such distribution will be treated as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in the shares (with a corresponding reduction in such tax basis) and thereafter will be treated as capital gain. Such capital gain will be long-term capital gain if the U.S. Holder’s holding period for the SLB common stock exceeds one year.

 

85


Table of Contents

Sale or Other Taxable Disposition of SLB Common Stock

Subject to the discussion below under Passive Foreign Investment Company Considerations,” a U.S. Holder will generally recognize capital gain or loss on any sale or other taxable disposition of SLB common stock in an amount equal to the difference, if any, between the amount realized on such disposition and the U.S. Holder’s adjusted tax basis in such stock. Capital gains of a non-corporate U.S. Holder will be eligible for the preferential U.S. federal income tax rates applicable to long-term capital gains if the U.S. Holder has held its SLB common stock for more than one year as of the date of the disposition. The deductibility of capital losses is subject to limitations.

Passive Foreign Investment Company Considerations

In general, a foreign corporation such as SLB will be classified as a “passive foreign investment company” or “PFIC” for any taxable year in which either (1) 75% or more of its gross income is passive income (generally, dividends, interest, gains from the sale or exchange of investment property, and certain rents and royalties) or (2) at least 50% of the average value of its assets consists of assets that produce, or that are held for the production of, passive income. For purposes of applying these tests, the foreign corporation is deemed to own its proportionate share of the assets of, and to receive directly its proportionate share of the income of, any other corporation in which the foreign corporation owns, directly or indirectly, at least 25% of the value of the stock.

If SLB were classified as a PFIC, then U.S. Holders could be subject to various adverse consequences with respect to the ownership and disposition of SLB common stock unless the U.S. Holders make certain elections. These adverse consequences include taxation of gain on a sale or other disposition of SLB common stock and taxation of certain distributions (which may include distributions that would otherwise be treated as “qualified dividends”) at the maximum ordinary income rates and the imposition of an interest charge on such gain and distributions.

SLB believes that it has not been a PFIC in any prior taxable year, will not be a PFIC in the taxable year in which the Merger occurs, and will not become a PFIC in the foreseeable future. However, because the tests for determining PFIC status are applied annually, and it is difficult to accurately predict future income and assets relevant to this determination, there can be no assurance that SLB will not become a PFIC. U.S. Holders are urged to consult their tax advisors regarding the application of the PFIC rules to their investment in SLB common stock, including the availability of certain shareholder elections.

Specified Foreign Financial Assets

Individual U.S. Holders that own “specified foreign financial assets” with an aggregate value in excess of $50,000 are generally required to file an information statement along with their tax returns, currently on IRS Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a foreign financial institution, as well as securities issued by a foreign issuer (which would include SLB common stock) that are not held in accounts maintained by financial institutions. Higher reporting thresholds apply to certain individuals living abroad and to certain married individuals. Treasury regulations have been proposed that, if finalized, would extend this reporting requirement to certain entities that are treated as formed or availed of to hold direct or indirect interests in specified foreign financial assets based on certain objective criteria. U.S. Holders who fail to report the required information could be subject to substantial penalties. U.S. Holders are urged to consult their tax advisors concerning the application of these rules to their investment in SLB common stock.

Non-U.S. Holders

Distributions

A Non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding on dividends in respect of SLB common stock. However, if such dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if an income tax treaty applies, is attributable to a U.S.

 

86


Table of Contents

permanent establishment of the Non-U.S. Holder), then the Non-U.S. Holder will generally be subject to U.S. federal income tax under the rules described above as if it were a U.S. Holder of SLB common stock and, in the case of a foreign corporation, may be subject to an additional “branch profits tax” at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty).

Sale or Other Taxable Disposition of SLB Common Stock

A Non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding on any gain recognized on a sale or other taxable disposition of SLB common stock unless:

 

   

the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if an income tax treaty applies, is attributable to a U.S. permanent establishment of the Non-U.S. Holder); or

 

   

the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year that includes the Merger and certain other conditions are satisfied.

If the Non-U.S. Holder’s gain is described in the first bullet, then the Non-U.S. Holder will generally be subject to U.S. federal income tax under the rules described above as if it were a U.S. Holder of SLB common stock and, in the case of a foreign corporation, may be subject to an additional “branch profits tax” at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty).

If the Non-U.S. Holder is described in the second bullet, then such Non-U.S. Holder will be subject to U.S. federal income tax at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty) on the gain, which may be offset by certain U.S. source capital losses of the Non-U.S. Holder.

Information Reporting and Backup Withholding

Dividends paid with respect to shares of SLB common stock and proceeds from a sale or other disposition of shares of SLB common stock received in the United States or through certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding (currently at a 24% rate) unless the Holder provides proof of an applicable exemption or furnishes its taxpayer identification number and otherwise complies with all applicable requirements under the backup withholding rules. Any amounts withheld under the backup withholding rules are not additional tax and may be allowed as a refund or credit against the Holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.

Regulatory Approvals Required for the Merger

Antitrust Approvals

The Merger is subject to review by antitrust regulators in the United States under the HSR Act. Under the HSR Act, SLB and ChampionX are required to make premerger notification filings and to await the expiration or early termination of the statutory waiting period (and any extension of the waiting period) prior to completing the Merger. On April 23, 2024, SLB and ChampionX each filed a Premerger Notification and Report Form under the HSR Act.

The Merger is also subject to antitrust review by government authorities in several non-U.S. jurisdictions, including Australia, Brazil, Canada, Mexico, New Zealand, Norway, Saudi Arabia and the United Kingdom. The parties have made or will make additional antitrust filings in certain other jurisdictions outside the United States.

Pursuant to the Merger Agreement, SLB and its affiliates agreed to use their reasonable best efforts, subject to certain limitations, to resolve any objections and avoid or eliminate each impediment that a governmental entity (other than CFIUS) may assert under applicable regulatory laws with respect to the Transactions to enable the

 

87


Table of Contents

consummation of the Merger to occur as promptly as practicable (and in any event no later than the End Date). However, SLB and its affiliates will not be obligated to take remedial actions for purposes of resolving any such objection or avoiding or eliminating any such impediment, except to the extent that such remedial action: (i) does not involve any businesses, assets, equity interests, product lines, properties, contracts, agreements, commercial arrangements, relationships, ventures, rights or obligations of SLB or its affiliates or the Chemical Technologies business of ChampionX and its subsidiaries and (ii) would not and would not reasonably be expected to, individually or in the aggregate, result in a loss of more than 8% of the aggregate annual revenues of ChampionX and its subsidiaries, taken as a whole, as measured by the 12 months ended December 31, 2023.

If the Merger has not occurred on or before the End Date due to the failure to obtain regulatory approvals, or a Mutual Legal Restraint, the Merger Agreement may be terminated by either party. Upon termination of the Merger Agreement under specified circumstances, including the termination by either party if certain Mutual Legal Restraints exist, specified regulatory approvals have not been obtained or if the consummation of the Merger does not occur on or prior to the End Date based on an injunction or prohibition under the Regulatory Laws or by SLB if it does not exercise its right to an Extension Election or if Specified Legal Restraints exist and the closing conditions relating to the absence of Mutual Legal Restraints or the receipt of certain specified regulatory approvals have not been satisfied, SLB would be required to pay ChampionX a termination fee of $326.6 million.

There can be no assurance that the Merger will not be challenged on antitrust or competition grounds or, if a challenge is made, what the outcome of such a challenge would be. The Antitrust Division of the U.S. Department of Justice, the U.S. Federal Trade Commission, any U.S. state and other applicable U.S. or non-U.S. regulatory bodies may challenge the Merger on antitrust or competition grounds at any time, including after the expiration or termination of the waiting period under the HSR Act or other applicable process, as they may deem necessary or desirable or in the public interest. Accordingly, at any time before or after the completion of the Merger, any such party could take action under the antitrust and competition laws, including, without limitation, by seeking to enjoin the Merger or permitting completion subject to regulatory concessions or conditions. Private parties may also seek to take legal action under antitrust or competition laws under certain circumstances.

Other Regulatory Procedures

The Merger may be subject to certain regulatory requirements of other municipal, state and federal, U.S. or non-U.S. governmental agencies and authorities, including those relating to the offer and sale of securities. SLB and ChampionX are currently working to evaluate and comply in all material respects with these requirements, as appropriate, and do not currently anticipate that they will hinder, delay or restrict completion of the Merger.

Dividend Policy

SLB paid quarterly cash dividends of $0.25 per share of SLB common stock during 2023. On January 19, 2024, the SLB Board approved an increase to SLB’s quarterly cash dividend to $0.275 per share of SLB common stock, which was most recently paid on April 4, 2024. The terms of the Merger Agreement limit the ability of SLB to authorize or pay additional dividends, except for regular quarterly cash dividends on SLB common stock consistent with past practice (including any historical increases in such cash dividends).

ChampionX has paid quarterly cash dividends of between $0.075 and $0.085 per share of ChampionX common stock since the first quarter of 2023. On January 31, 2024, the ChampionX Board approved an increase of the quarterly cash dividend to $0.095 per share of ChampionX common stock, which was most recently paid on April 26, 2024. Pursuant to the terms of the Merger Agreement, between the signing of the Merger Agreement and the closing date, ChampionX may continue to pay its regular quarterly cash dividends with customary record and payment dates, subject to certain exceptions.

 

88


Table of Contents

Closing and Effective Time

Unless the parties otherwise mutually agree, the closing of the Merger will occur on the second business day after all the conditions to the closing of the Merger are satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing of the Merger, but subject to the satisfaction or waiver of such conditions). Subject to the satisfaction or waiver of the conditions to the completion of the Merger described in the section entitled “The Merger Agreement—Conditions to the Merger,” including the approval of the Merger Proposal by ChampionX’s stockholders at the ChampionX Special Meeting, it is currently anticipated that the Merger will close before the end of 2024. It is possible that factors outside the control of SLB and ChampionX could result in the Merger being completed at a different time, or not at all.

The Merger will be effective at the time the certificate of merger is filed with the Secretary of State of the State of Delaware or at such other, later time as is agreed between SLB and ChampionX and specified in the certificate of merger.

 

89


Table of Contents

THE MERGER AGREEMENT

The following section describes the material provisions of the Merger Agreement but does not purport to describe all of the terms of the Merger Agreement. The provisions of the Merger Agreement are complicated and not easily summarized. The following summary may not contain all of the information about the Merger Agreement that is important to you and is qualified in its entirety by reference to the complete text of the Merger Agreement, which is attached as Annex A to this proxy statement/prospectus and incorporated into this proxy statement/prospectus by reference. SLB and ChampionX urge you to read the full text of the Merger Agreement before making any decisions regarding the Merger, including approval of the Merger Proposal, because it is the legal document that governs the Merger.

Representations, Warranties and Covenants in the Merger Agreement Are Not Intended to Function or Be Relied on as Public Disclosures

In reviewing the Merger Agreement, please remember that it is included to provide you with information regarding its terms and is not intended to provide any other factual information about SLB or ChampionX. The Merger Agreement contains representations and warranties by each of the parties to the Merger Agreement. These representations and warranties have been made solely for the benefit of the other parties to the Merger Agreement and:

 

   

may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate,

 

   

have been qualified by certain disclosures that were made to the other party in connection with the negotiation of the Merger Agreement, which disclosures are not reflected in the Merger Agreement, and

 

   

may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors.

Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement/prospectus, may have changed since the date of the Merger Agreement, and subsequent developments or new information qualifying a representation or warranty may have been included in or incorporated by reference into this proxy statement/prospectus.

For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone or relied upon as characterizations of the actual state of facts or condition of SLB, ChampionX or any of their respective subsidiaries or affiliates. Instead, such provisions or descriptions should be read only in conjunction with the other information provided elsewhere in this document or incorporated by reference into this proxy statement/prospectus, as described in the section entitled “Where You Can Find More Information.

Structure of the Merger

Pursuant to the Merger Agreement, at the Effective Time, Merger Sub will merge with and into ChampionX in accordance with the requirements of Delaware law, whereupon the separate existence of Merger Sub will cease and ChampionX will continue as the Surviving Corporation in the Merger as an indirect wholly owned subsidiary of SLB. Following the Merger, ChampionX common stock will be delisted from Nasdaq, will be deregistered under the Exchange Act and will cease to be publicly traded. Upon effectiveness of the Merger, each ChampionX stockholder will have the right to receive the consideration described below under “Equity Consideration.

Effective Time; Closing

Unless the parties otherwise mutually agree, the completion of the Merger will occur on the second business day after all the conditions to the closing of the Merger are satisfied or waived (other than those conditions that by

 

90


Table of Contents

their nature are to be satisfied at the closing of the Merger, but subject to the satisfaction or waiver of such conditions). Subject to the satisfaction or waiver of the conditions to the completion of the Merger described in the section entitled “Conditions to the Merger,” including the approval of the Merger Proposal by ChampionX’s stockholders at the ChampionX Special Meeting, it is currently anticipated that the Merger will close before the end of 2024. It is possible that factors outside the control of both companies could result in the Merger being completed at a different time, or not at all.

The Merger will be effective at the Effective Time, which will be the time the certificate of merger is filed with the Secretary of State of the State of Delaware or such other, later time as is agreed between SLB and ChampionX and specified in the certificate of merger.

Equity Consideration

The Merger Agreement provides that at the Effective Time, each share of ChampionX common stock issued and outstanding immediately prior to the Effective Time (other than ChampionX Excluded Stock) will be converted into the right to receive 0.735 shares of SLB common stock and cash in lieu of fractional shares, if any, as described under “Fractional Shares.”

Fractional Shares

No fractional shares of SLB common stock will be delivered to any holder of ChampionX common stock upon completion of the Merger. For each fractional share that would otherwise be delivered, SLB will pay cash (without interest rounded up to the nearest whole cent) in an amount equal to the product of (i) the volume-weighted average closing sale price of a share of SLB common stock as reported on the NYSE for the 15 consecutive full trading days (in which shares of SLB common stock are traded on the NYSE) ending at the close of trading on the full trading day immediately preceding the closing date and (ii) the fraction of share SLB common stock that such holder would otherwise be entitled to receive pursuant to the Merger Agreement.

Treatment of Equity Awards

SARs. At the Effective Time, each ChampionX SAR (whether vested or unvested) that is outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive, within 10 business days following the closing, an amount in cash equal to the product of (1) the number of shares of ChampionX common stock underlying such ChampionX SAR multiplied by (2) the excess, if any, of the ChampionX Closing Price over the exercise or reference price of such ChampionX SAR. If the product of clauses (1) and (2) in the foregoing sentence is not greater than zero, at the Effective Time such ChampionX SAR will automatically be cancelled for no consideration.

Options. At the Effective Time, each ChampionX Option that is outstanding immediately prior to the Effective Time will automatically be converted into an SLB Option with respect to that number of shares of SLB common stock that is equal to (i) the product of (A) the number of shares of ChampionX common stock underlying such ChampionX Option as of immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole number, at an exercise price per share equal to the quotient obtained by (x) dividing (i) the per share exercise price of the ChampionX Option by (ii) the Exchange Ratio, (y) rounded up to the nearest whole cent, provided, however, that the exercise price and the number of shares of SLB common stock covered by such SLB Option will be determined in a manner that is intended to be consistent with the requirements of Section 409A of the Code. Each SLB Option will otherwise continue to have, and will be subject to, the same terms and conditions as applied to the ChampionX Option immediately prior to the Effective Time.

RSUs; DERs. At the Effective Time, each ChampionX RSU Award that is outstanding immediately prior to the Effective Time will be assumed and converted into an SLB RSU Award, which will have, and be subject to, the same terms and conditions as applied to the ChampionX RSU Award immediately prior to the Effective Time,

 

91


Table of Contents

except that, (x) the number of shares of SLB common stock subject to the SLB RSU Award will equal (i) the product of (A) the number of shares of ChampionX common stock underlying such ChampionX RSU Award multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share, (y) each SLB RSU Award will vest in full if, following the Effective Time, the holder thereof incurs a qualifying termination of employment by SLB or its subsidiaries at any time that such SLB RSU Award remains outstanding (and, solely in the case of a qualifying termination that occurs more than 18 months following the closing date, subject to the holder timely executing (and not revoking) a general release of claims in a form provided by SLB or one of its subsidiaries), and (z) SLB RSU Awards will not be entitled to receive any dividend equivalent rights with respect to any dividends declared or accrued following the Effective Time. At the Effective Time, each ChampionX DER (whether vested or unvested) will be cancelled and converted into the right to receive within 10 business days following the closing date, an amount in cash equal to the ChampionX Pre-Closing Dividend Amount. The term “ChampionX Pre-Closing Dividend Amount” means, with respect to a ChampionX RSU Award, the amount accrued in a bookkeeping account as of immediately prior to the closing with respect to ChampionX DERs granted in tandem with ChampionX RSU Awards.

Performance Share Awards. At the Effective Time, each ChampionX Performance Share Award that is outstanding immediately prior to the Effective Time will be assumed and converted into an SLB RSU Award, which will have, and be subject to, the same terms and conditions as applied to the ChampionX Performance Share Award immediately prior to the Effective Time, except that, (x) the number of shares of SLB common stock subject to the SLB RSU Award will equal (i) the product of (A) a number of shares of ChampionX common stock underlying such ChampionX Performance Share Award determined based on such award’s Applicable Performance Level by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share, (y) each such SLB RSU Award will vest in full if, following the Effective Time, the holder thereof incurs a qualifying termination (and, solely in the case of a qualifying termination that occurs more than 18 months following the closing date, subject to the holder timely executing (and not revoking) a general release of claims in a form provided by SLB or one of its subsidiaries), and (z) SLB RSU Awards will not be subject to any performance-based vesting conditions, which will be deemed achieved at the Applicable Performance Level.

DSU Awards. At the Effective Time, each ChampionX DSU Award (whether vested or unvested) that is outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive, within 10 business days following the closing date, a number of shares of SLB common stock equal to (i) the product of (A) the number of shares of ChampionX common stock underlying the ChampionX DSU Award multiplied by (B) the Exchange Ratio, (ii) rounded down to the nearest whole share.

Equity Plan. At the Effective Time, SLB will assume all of ChampionX’s obligations under the ChampionX Equity Plan, each outstanding ChampionX Equity Award and the agreements evidencing the grants thereof, and the number and kind of shares available for issuance under the ChampionX Equity Plan will be adjusted to reflect shares of SLB common stock in accordance with the provisions of the ChampionX Equity Plan.

Exchange of Shares; Stock Transfer Books

The conversion of ChampionX common stock into the right to receive the Equity Consideration will occur automatically at the Effective Time. Immediately prior to the Effective Time, SLB will issue to Holdco, by way of sale or as a contribution (through the relevant intermediate entity(ies)) to the capital of Holdco or a combination thereof, that number of shares of SLB common stock that are to be delivered by Holdco to the holders of ChampionX common stock pursuant to the Merger Agreement. Each share of ChampionX common stock issued and outstanding (other than shares held by ChampionX and its subsidiaries) will be converted into the right to receive 0.735 shares of SLB common stock.

Promptly after the Effective Time, Holdco will instruct the exchange agent to mail to each record holder of shares of ChampionX common stock as of the Effective Time a letter of transmittal and instructions for use in effecting the surrender of the shares of ChampionX common stock in exchange for the Equity Consideration.

 

92


Table of Contents

Any portion of the Equity Consideration that remains undistributed to the former holders of ChampionX common stock for 12 months after the Effective Time will be delivered to Holdco upon demand, and any remaining former holders of shares of ChampionX common stock will thereafter look only to Holdco for payment of the Equity Consideration. Any amounts remaining unclaimed by former holders of shares of ChampionX common stock immediately prior to such time as such amounts would otherwise escheat to or become the property of any governmental entity will, to the extent permitted by applicable law, become the property of Holdco.

Lost, Stolen or Destroyed Certificates

If any certificate is lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed (and, if required by SLB, the posting by such person of a bond) in such reasonable amount as SLB may direct, as indemnity against any claim that may be made against it with respect to such certificate, the exchange agent will issue for such lost, stolen or destroyed certificate the Equity Consideration to be paid in respect of the share of ChampionX common stock represented by such certificate.

Appraisal Rights

Under Delaware law (with respect to ChampionX stockholders) and the laws of Curaçao (with respect to SLB shareholders), neither ChampionX stockholders nor SLB shareholders will be entitled to appraisal rights or dissenters’ rights in connection with the Merger, the issuance of shares of SLB common stock in connection with the Merger, or the Transactions.

Withholding Taxes

SLB, Holdco, the Surviving Corporation, the exchange agent and any other applicable tax withholding agent (each, a “Withholding Agent”) will be entitled to deduct and withhold from consideration payable to any ChampionX stockholder the amounts that may be required to be withheld under any applicable tax law. Such Withholding Agent may sell or cause to be sold any SLB common stock otherwise issuable to any ChampionX stockholder as necessary to satisfy applicable withholding obligations. Amounts withheld and paid over to a governmental entity will be treated for all purposes of the Merger Agreement as having been paid to the stockholders from whom they were withheld.

Representations and Warranties

The Merger Agreement contains representations and warranties made by each of the parties regarding aspects of their respective businesses, financial condition and structure, as well as other facts pertinent to the Merger. These representations and warranties are, in many respects, subject to materiality, knowledge and other similar qualifications contained in the Merger Agreement and expire at the Effective Time.

Many of the representations and warranties are reciprocal and apply to ChampionX, on the one hand, and SLB, Holdco and Merger Sub, on the other hand, and their respective subsidiaries, including the following matters:

 

   

existence, good standing and qualification to conduct business;

 

   

capitalization;

 

   

requisite power and authorization to enter into the Merger Agreement and to consummate the Transactions (with respect to ChampionX, subject to the ChampionX Stockholder Approval);

 

   

governmental and regulatory approvals necessary to enter into the Merger Agreement and to consummate the Transactions;

 

   

compliance with the Sarbanes-Oxley Act of 2002 and the applicable listing and corporate governance rules and regulation of the NYSE and the Nasdaq;

 

93


Table of Contents
   

compliance with applicable laws and permits;

 

   

tax matters;

 

   

absence of any conflict or violation of organizational documents, third party agreements or laws as a result of the Merger Agreement or consummation of the Transactions;

 

   

filings and reports with the SEC and financial information;

 

   

absence of litigation;

 

   

absence of a material adverse effect;

 

   

absence of certain changes or events since December 31, 2023;

 

   

absence of decrees or injunctions;

 

   

ownership of the other party or parties’ capital stock;

 

   

compliance with export controls and trade sanctions; and

 

   

compliance with the Foreign Corrupt Practices Act and other anticorruption and antibribery laws.

ChampionX, on the one hand, and SLB, on the other hand, and their respective subsidiaries, have made additional representations and warranties in the Merger Agreement with respect to the following subject matters:

 

   

internal accounting controls and disclosure controls and procedures;

 

   

absence of undisclosed liabilities;

 

   

absence of material claims of breach of any environmental law or regulation, and compliance with such laws or regulations for the past three years;

 

   

accuracy of information supplied for inclusion or incorporation in this proxy statement/prospectus;

 

   

absence of material tax law non-compliance, failure to file, claims, litigation, or liability;

 

   

absence of material intellectual property claims or infringement, misappropriation or violation of intellectual property rights of any third party; and

 

   

absence of any third party finders or brokers fees in relation to the Merger.

ChampionX and its subsidiaries have made additional representations and warranties to SLB, Holdco and Merger Sub in the Merger Agreement with respect to the following subject matters:

 

   

company benefit plans and eligible employees;

 

   

marketable title of material real property;

 

   

insurance policies and amounts;

 

   

the opinion of financial advisor received by the ChampionX Board;

 

   

disclaimer of any material contracts;

 

   

the 20 largest customers and suppliers by revenue and cost, respectively;

 

   

data protection policies;

 

   

disclaimer of any transactions between ChampionX and its subsidiaries or between its subsidiaries;

 

   

disclosure of joint ventures, partnerships, and other similar arrangements; and

 

   

investigation of any sexual harassment, discrimination, or other such claims and having taken corrective actions, if any.

SLB and its subsidiaries have made additional representations and warranties to ChampionX in the Merger Agreement with respect to:

 

   

investigation of any sexual harassment, discrimination, or other such claims and having taken corrective actions, if any.

 

94


Table of Contents

Certain representations and warranties of ChampionX and its subsidiaries are qualified as to materiality or as to “material adverse effect,” which when used with respect to ChampionX and its subsidiaries means, as the case may be, a material adverse effect on the business, property, assets, financial condition or results of operations of ChampionX and its subsidiaries, taken as a whole, other than any event, change, effect, development, circumstance, condition or occurrence resulting from, relating to or arising out of:

 

   

any changes or developments in the natural gas gathering, compressing, treating, processing and transportation industry generally;*

 

   

any changes or developments in prices for oil, natural gas, condensate or natural gas liquids or other commodities or for ChampionX or any of its subsidiaries’ raw material inputs and end products;*

 

   

the announcement or the existence of, compliance with or performance under, the Merger Agreement or the Transactions (including the identity of SLB and its affiliates, the impact of the Transactions on the relationships, contractual or otherwise, of ChampionX or any of its subsidiaries with employees, labor unions, customers, suppliers or partners, and any lawsuit, action or other proceeding with respect to the Transactions) (provided, that this exception will not apply in connection with any breach or inaccuracy of a representation or warranty set forth in the Merger Agreement expressly addressing the consequences of the announcement or existence of, compliance with or performance under, the Merger Agreement);

 

   

any taking of any action or failure to take any action, in either case, as required by the Merger Agreement or taken (or omitted to be taken) at the written request of SLB, Holdco or Merger Sub;

 

   

changes or proposed changes in laws, rules or regulations of general applicability to companies in the industries in which ChampionX and any of its subsidiaries operate, or interpretations thereof by courts or governmental entities;*

 

   

any changes in GAAP or accounting standards or interpretations thereof;*

 

   

changes in or generally affecting the economy, the financial, credit or securities markets, or political, legislative or regulatory conditions, in each case in the United States or elsewhere in the world, including any changes in currency exchange rate, interest rates, monetary policy or inflation;*

 

   

any changes or developments in or affecting the industries in which ChampionX or any of its subsidiaries operate;*

 

   

any hurricane, cyclone, tornado, earthquake, flood, tsunami, natural disaster, act of God, weather-related events or other comparable events, including any natural or man-made disasters or from any outbreak of any disease, pandemic, any quarantine or similar applicable laws, directives, guidelines or recommendations promulgated by any industry group or any governmental entity or other public health events or outbreak or escalation of hostilities or war (whether or not declared), geopolitical conditions, military actions or any act of sabotage or terrorism, or national or international political or social conditions (including the conflict in Ukraine and the conflict in Israel and the surrounding region) and any sanctions or similar actions relating thereto;*

 

   

any failure by ChampionX to meet any internal or external financial projections or forecasts or estimates of revenues, earnings or other financial metrics for any period (provided, that this exception will not prevent or otherwise affect a determination that any event, change, effect, circumstance, condition, development or occurrence underlying such failure has resulted in, or contributed to, a material adverse effect of ChampionX);

 

   

any changes in the share price or trading volume of ChampionX common stock or in the credit rating of ChampionX or any of its subsidiaries (provided that this exception will not prevent or otherwise affect a determination that any event, change, effect, development or occurrence underlying such change has resulted in, or contributed to, a material adverse effect of ChampionX); and

 

   

the failure to obtain any approvals or consents from any governmental entity or other person in connection with the Transactions,

 

95


Table of Contents

provided that, in the case of the seven bullets marked with an asterisk (*) above, solely to the extent disproportionately affecting ChampionX and its subsidiaries, taken as a whole, relative to other similarly situated companies in the industries in which ChampionX and its subsidiaries operate, in which case only such disproportionate effect will be taken into account in determining whether there has been, or would be reasonably likely to be, a “material adverse effect.”

Certain representations and warranties of SLB, Holdco and Merger Sub are also qualified as to materiality or as to “material adverse effect,” which when used with respect to SLB, Holdco and Merger Sub means, as the case may be, any event, change, effect, development or occurrence that, either individually or in the aggregate, is or would be reasonably likely to prevent or materially impair, interfere with, hinder or delay the consummation of the Merger, or SLB, Holdco or Merger Sub’s ability to consummate the Merger or the Transactions, including the issuance of the Equity Consideration.

Conduct of Business Pending the Effective Time

ChampionX has agreed that, until the earlier of the termination of the Merger Agreement or the Effective Time, except as may be required by applicable law, as may be consented to in writing by SLB (which consent may not be unreasonably withheld, conditioned or delayed), as otherwise contemplated by the Merger Agreement or as set forth on ChampionX’s disclosure schedule to the Merger Agreement, ChampionX will conduct its business, and cause its subsidiaries to conduct their business, in each case, in the ordinary course of business, and preserve, and cause its subsidiaries to preserve, their relationships with clients, customers, suppliers, distributors and creditors and other persons with which such entity has significant business relations in all material respects.

ChampionX has further agreed that, until the earlier of the termination of the Merger Agreement or the Effective Time, except as may be required by applicable law, as may be consented to in writing by SLB (which consent may not be unreasonably withheld, conditioned or delayed), as otherwise contemplated by the Merger Agreement or as set forth on ChampionX’s disclosure schedule to the Merger Agreement, ChampionX will not, and will cause its subsidiaries not to:

 

   

(A) adopt any amendments (except for immaterial or ministerial amendments to the by-laws of ChampionX, as adopted by the ChampionX Board) to the organizational documents or (B) adopt any amendments to the articles of incorporation, by-laws or similar organizational documents of any subsidiary of ChampionX, in the case of this clause (B), that would reasonably be expected to be materially adverse to SLB or any of its affiliates;

 

   

issue, sell, pledge, dispose of, encumber with any lien, split, combine or reclassify or authorize the issuance, sale, pledge, disposition, encumbrance, split, combination or reclassification of, any equity interest in ChampionX or any of its subsidiaries or any securities convertible into or exchangeable for any such equity interests, or any rights, warrants or options to acquire any such shares of capital stock, ownership interest or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable option under any existing ChampionX benefit plans, other than (A) liens pursuant to any joint venture, partnership or limited liability company agreement or similar contract relating to the formation, creation, operation, management or control of any such arrangement in effect as of the date of the Merger Agreement, (B) intercompany transactions not involving equity interests of ChampionX or among ChampionX’s wholly owned subsidiaries, (C) issuances of shares of ChampionX common stock in respect any ChampionX Equity Awards, (D) as required by any existing ChampionX benefit plans or any ChampionX benefit plans entered into or amended in accordance with the terms of the Merger Agreement or (E) any properties or assets of the ChampionX or its subsidiaries;

 

   

declare or pay any dividend or other distribution or payment, except for certain intercompany distributions, or regular quarterly cash dividends with customary record and payment dates on the shares of ChampionX common stock subject to certain limitations;

 

96


Table of Contents
   

adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, or enter into a letter of intent or agreement in principle with respect thereto, except for (A) the Transactions, (B) intercompany mergers, consolidations, restructurings or reorganizations or (C) certain mergers, consolidations, restructurings or reorganizations of ChampionX’s subsidiaries in connection with an acquisition permitted under the terms of the Merger Agreement;

 

   

make any acquisition of any other person or business or make any loans, advances or capital contributions to, or investments in, any other person with a value in excess of $10 million individually or $20 million in the aggregate, except for those (A) contemplated in the aggregate annual capital expenditure budget prepared for ChampionX in its forecast for 2024, (B) involving any ChampionX joint venture of up to $50 million in the aggregate or (C) made in connection with intercompany transactions (provided, that ChampionX will not, and will not permit any of its subsidiaries to, make any acquisition of any other person or business or make loans, advances or capital contributions to, or investments in, any other person that would reasonably be expected to materially prevent, impede or delay the consummation of the Merger);

 

   

authorize any capital expenditures in excess of 115% of the aggregate annual capital expenditure budget prepared for ChampionX in the aggregate annual capital expenditure budget prepared for ChampionX in its forecast for 2024, or 125% of the aggregate annual capital expenditure budget prepared for ChampionX in its forecast for 2024 for the period beginning on January 1, 2025 if closing has not occurred by December 31, 2024;

 

   

sell, lease, license, transfer, exchange or swap or otherwise dispose of any properties (including real property) or non-cash assets (excluding intellectual property) with a value in excess of $25 million individually or $50 million in the aggregate, excluding (A) sales, transfers and dispositions of obsolete or worthless equipment, (B) intercompany transactions or (C) in the ordinary course of business;

 

   

sell, assign, transfer, license (or grant a covenant not to sue with respect to), abandon, dedicate to the public, permit to lapse, or otherwise dispose of any material intellectual property, except nonexclusive licenses entered into in the ordinary course of business;

 

   

disclose any material trade secrets or other material confidential information included in ChampionX’s intellectual property to any person, except in the ordinary course of business to persons who are under a contractual, legal or legally enforceable obligation to maintain the confidentiality thereof;

 

   

except as required by the existing terms of a ChampionX benefit plan:

 

   

materially increase the compensation, bonus, commission, or other benefits payable or provided of any directors, executive officers or employees or other individual service providers, except in the ordinary course of business for non-officer level employees;

 

   

pay or award any bonuses or incentive compensation, except in the ordinary course of business, or grant any severance or termination pay to any directors, officers, employees or other individual service providers;

 

   

establish, adopt, enter into, terminate or materially amend any ChampionX benefit plan (or any other benefit or compensation plan, policy, program, contractor, agreement, or arrangement that would be a ChampionX benefit plan if it were in effect), except as required under law or for annual renewals in the ordinary course of business that would not result in material additional or increased costs and further excluding any offer letters that provide for no retention, severance or change in control benefits;

 

   

enter into, terminate, extend or amend a collective bargaining agreement or other agreement with a labor union, works council or other labor organization, or recognize or certify any labor union, labor organization, works council, or group of employees of ChampionX or any of its subsidiaries as the bargaining representative for any employees of ChampionX or any of its subsidiaries;

 

97


Table of Contents
   

hire or terminate (except for cause or due to death or disability) any director, officer, employee or other individual service provider whose annual compensation opportunity would exceed (or exceeds) $125,000, except in the ordinary course of business to fill any vacancies that are in existence on the date of the Merger Agreement or that arise following the date of the Merger Agreement due to a separation with the applicable director, officer, employee or service provider (other than a vacancy of an executive officer-level position or a vacancy created by the separation of a key employee), in each case, in the ordinary course of business, and provided that such hired director, officer, employee, or service provider will not be entitled to receive, without the consent of SLB, any ChampionX Equity Awards, payment, or benefits in connection with the Merger;

 

   

grant any ChampionX Equity Awards;

 

   

take action to accelerate any payment or benefit, or the funding thereof, payable to or to become payable to any directors, officers, employees or other individual service providers (including by amending or waiving any performance or vesting criteria); or

 

   

enter into or make any loans or advances to any directors, officers, employees or other individual service providers, except in the ordinary course of business or for travel or reasonable business expenses;

 

   

implement any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that would reasonably be expected to trigger the notice requirements of the WARN Act;

 

   

agree to waive or release any material noncompetition, non-solicitation, nondisclosure or other restrictive covenant obligation of any current or former employees or independent contractors;

 

   

materially change financial accounting policies or procedures, except as required by changes in GAAP;

 

   

directly or indirectly, purchase, redeem or otherwise acquire any of ChampionX’s or its subsidiaries’ capital stock, or any rights, warrants or options to acquire any such shares or equity interests, except for intercompany transactions;

 

   

incur, assume, guarantee or otherwise become liable for any indebtedness or any guarantee of such indebtedness except for (A) in the ordinary course of business, (B) intercompany debt or guarantees, (C) indebtedness incurred to replace, renew, extend, refinance or refund any existing indebtedness on substantially the same or more favorable terms to ChampionX than such existing indebtedness, or (D) any indebtedness incurred pursuant to ChampionX’s credit agreements and certain other receivable facilities and account for services agreements not in excess of $250 million in the aggregate;

 

   

prepay, redeem, repurchase, defease, or cancel any indebtedness for borrowed money or guarantees except (A) at stated maturity, (B) as prepayment and repayment of existing indebtedness in connection with any replacement, renewal, extension, refinancing or refund thereof in accordance with the terms of the Merger Agreement, (C) as prepayment and repayment of revolving loans in the ordinary course of business, (D) for any required amortization payments and mandatory prepayments, or (E) for intercompany transactions;

 

   

other than in the ordinary course of business, (A) enter into any material contracts, (B) modify, amend, terminate or waive any rights under any material contracts or under any ChampionX permit in a manner or with a materially adverse effect, or (C) incur any lien;

 

   

waive, release, assign, settle or compromise any claim, action or proceeding, except for such waivers, releases, assignments, settlements or compromises (A) with respect to litigation relating to the Merger Agreement or the Transactions, (B) equal to or lesser than the amounts reserved with respect thereto on the balance sheet as of the December 31, 2023 included in ChampionX’s public filings or (C) for amounts in excess of $5 million individually, or $20 million in the aggregate (excluding amounts covered by insurance);

 

98


Table of Contents
   

(A) change its fiscal year or any method of tax accounting, (B) make, change or revoke any material tax election, (C) enter into any closing agreement with respect to, or otherwise settle or compromise, any liability for material taxes, (D) file any amended tax return, (E) surrender a claim for a material refund of taxes, (F) incur any material tax liability outside of the ordinary course of business, or (G) fail to pay any income or other material tax (including estimated tax payments or installments) that becomes due and payable;

 

   

except in compliance in all material respects with compliance programs in effect as of the date of the Merger Agreement, enter into or amend any agreement between ChampionX or any of its subsidiaries and any agent or sales representative that is subject to any license granted by the U.S. Office of Foreign Assets Control;

 

   

enter into a new line of business other than in the ordinary course of business or abandon or discontinue any material existing line of business; and

 

   

agree or commit to do any of the foregoing.

SLB has agreed that, until the earlier of the termination of the Merger Agreement or the Effective Time, except as may be required by applicable law, as may be consented to in writing by ChampionX (which consent may not be unreasonably withheld, conditioned or delayed), as otherwise contemplated by the Merger Agreement or as set forth in SLB’s disclosure schedule to the Merger Agreement, each of SLB, Holdco and Merger Sub will conduct its business, and cause its subsidiaries to conduct their business, in each case, in the ordinary course of business, and preserve, and cause its subsidiaries to preserve, their relationships with clients, customers, suppliers, distributors and creditors and other persons with which such entity has significant business relations in all material respects.

SLB has further agreed that, until the earlier of the termination of the Merger Agreement or the Effective Time, except as may be required by applicable law, as may be consented to in writing by ChampionX (which consent may not be unreasonably withheld, conditioned or delayed), as otherwise contemplated by the Merger Agreement or as set forth in SLB’s disclosure schedule to the Merger Agreement, each of SLB, Holdco, and Merger Sub will not, and will cause its subsidiaries not to:

 

   

adopt any material amendments to SLB’s or cause the adoption of any material amendment to Holdco’s organizational documents;

 

   

split, combine or reclassify any equity interests or other ownership interests of SLB, Holdco or Merger Sub or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of the equity interests or other ownership interests of SLB, Holdco or Merger Sub, except for an intercompany transaction;

 

   

authorize or pay any dividends on or make any distribution with respect to the outstanding equity securities of SLB, except regular quarterly cash dividends on SLB common stock consistent with past practice (including any historical increases in such cash dividends);

 

   

with respect to SLB and its significant subsidiaries, adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, or enter into a letter of intent or agreement in principle with respect thereto, except for (A) the Merger, (B) intercompany mergers, consolidations, restructurings or reorganizations or (C) in connection with an acquisition permitted by the Merger Agreement;

 

   

issue, sell, pledge, dispose of or encumber with any lien, or authorize the issuance, sale, pledge, disposition or encumbrance of, any equity interest or other ownership interest in SLB or any securities convertible into or exchangeable for any such equity interests or other ownership interest, or any rights, warrants or options to acquire any such shares of capital stock, ownership interest or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable option under any existing SLB benefit plans (except as otherwise provided by the terms of the Merger

 

99


Table of Contents
 

Agreement or the express terms of any unexercisable or unexercised options or warrants outstanding on the date hereof), except (A) as set forth in SLB’s disclosure schedule to the Merger Agreement, (B) issuances of SLB common stock in respect of any exercise of SLB equity awards or in connection with the vesting or settlement of any SLB equity awards, (C) issuances of SLB common stock pursuant to SLB’s Discounted Stock Purchase Plan, (D) the grant of SLB equity awards, (E) the grant of equity interests pursuant to SLB’s 2004 Stock and Deferral Plan for Non-Employee Directors or (F) for intercompany transactions; and

 

   

agree or commit to do any of the foregoing.

Certain Additional Agreements

Special Meeting. ChampionX has agreed to use commercially reasonable efforts to (A) solicit from ChampionX stockholders proxies in favor of the Merger Proposal and (B) obtain ChampionX Stockholder Approval, including, unless the ChampionX Board has validly made a Change of Recommendation (as defined in the section entitled “—No Solicitation; Recommendation below), communicating to ChampionX stockholders the Change of Recommendation and including the Change of Recommendation in this proxy statement/prospectus, if applicable. ChampionX has agreed to (i) adjourn or postpone the ChampionX Special Meeting (A) to the extent necessary to ensure that any supplement or amendment to this proxy statement/prospectus that is required to be filed and disseminated under applicable law is provided to ChampionX stockholders, (B) in order to allow additional time for the solicitation of votes in order to obtain the ChampionX Stockholder Approval or because there are insufficient shares of ChampionX common stock represented (either in person, online, or represented by proxy) and entitled to vote to constitute a quorum necessary to conduct the business of the ChampionX Special Meeting (which postponement or adjournment will be for a period to be mutually agreed between SLB and ChampionX, but not to be later than the date that is 10 business days prior to the End Date) and (ii) may adjourn or postpone the ChampionX Special Meeting if, (A) as of the time for which the ChampionX Special Meeting is scheduled, ChampionX reasonably determines in good faith that there are insufficient shares of ChampionX common stock represented (either in person, online, or by proxy) to obtain the ChampionX Stockholder Approval or (B) with the prior written consent of SLB (which shall not be unreasonably withheld, delayed or conditioned); provided, however, that (x) the ChampionX Special Meeting shall not be adjourned or postponed pursuant to clause (i)(B) or (ii)(A) above, to a date on or after 10 business days prior to the End Date.

No Solicitation; Recommendation. Subject to certain limited exceptions, from April 2, 2024 until the earlier of the Effective Time and the date on which the Merger Agreement is terminated in accordance with its terms, ChampionX has agreed not to, and to cause its subsidiaries and its and their respective representatives not to, directly or indirectly:

 

   

solicit, initiate, seek or knowingly encourage or knowingly facilitate (including by way of furnishing non-public information) any proposal or offer or any inquiries regarding the making or submission of any proposal or offer, including any proposal or offer to ChampionX’s stockholders, that constitutes, or would reasonably be expected to lead to, a ChampionX Acquisition Proposal;

 

   

furnish any non-public information regarding ChampionX or any of its subsidiaries or afford access to the business, properties, books or records of ChampionX or any of its subsidiaries, to any person (other than SLB, Holdco, Merger Sub or their respective affiliates or representatives) in furtherance of or in response to a ChampionX Acquisition Proposal or any inquiries regarding a ChampionX Acquisition Proposal;

 

   

engage or participate in or otherwise knowingly facilitate any discussions or negotiations with any person (other than SLB, Holdco, Merger Sub or their respective affiliates or representatives) regarding a ChampionX Acquisition Proposal;

 

   

approve, endorse or recommend (or publicly propose to approve, endorse or recommend) any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, a ChampionX Acquisition Proposal;

 

100


Table of Contents
   

enter into any letter of intent, term sheet, memorandum of understanding, merger agreement, acquisition agreement, or exchange agreement, or duly execute any other agreement (whether binding or not) with respect to any inquiry, proposal or offer that (A) constitutes, or would reasonably be expected to lead to, a ChampionX Acquisition Proposal or (B) requires ChampionX to abandon, terminate or fail to consummate the Merger;

 

   

unless the ChampionX Board, or any committee thereof, concludes in good faith, after consultation with its outside legal counsel, that the failure to take such action would constitute a breach of its fiduciary duties under applicable law or ChampionX’s second amended and restated certificate of incorporation or amended and restated by-laws, amend or grant any waiver, release or modification under, or fail to enforce, any takeover law or any standstill or similar agreement with respect to any class of equity securities of ChampionX or any of its subsidiaries; or

 

   

resolve or agree to do any of the foregoing.

Notwithstanding these restrictions, the Merger Agreement provides that, at any time prior to obtaining the ChampionX Stockholder Approval, in certain circumstances where ChampionX receives a proposal prior to obtaining the ChampionX Stockholder Approval, the ChampionX Board, directly or indirectly through any officer, employee or representative, may (i) furnish non-public information to, and afford access to the business, properties, books or records of ChampionX and any of its subsidiaries to, any person and (ii) engage and participate in discussions and negotiations with any person, in each case in response to an unsolicited, written and bona fide ChampionX Acquisition Proposal.

ChampionX has agreed to promptly, and in no event later than 24 hours after its or any of its representatives’ receipt of any ChampionX Acquisition Proposal or any inquiry or request for discussions or negotiations regarding a ChampionX Acquisition Proposal or non-public information relating to ChampionX or any of its subsidiaries regarding a ChampionX Acquisition Proposal, advise SLB orally and in writing of such ChampionX Acquisition Proposal, inquiry or request. ChampionX must also keep SLB informed in all material respects on a reasonably prompt basis with respect to any change to the material terms of any such ChampionX Acquisition Proposal.

The term “ChampionX Acquisition Proposal” means any bona fide offer or proposal received from or made public by a third party (other than an offer, proposal or indication of interest by SLB, Holdco, Merger Sub or their respective subsidiaries) relating to any transaction or series of related transactions (other than the Transactions) pursuant to which any person, other than SLB, Holdco, Merger Sub or their respective affiliates, (A) directly or indirectly acquires beneficial ownership, or the right to acquire beneficial ownership, of any business or assets of ChampionX or any of its subsidiaries whose business constitutes 20% or more of ChampionX’s consolidated net revenues, net income, earnings before interest, tax, depreciation and amortization (“EBITDA”) or assets, (B) directly or indirectly acquires or purchases 20% or more of any class of equity securities of ChampionX or any of its subsidiaries whose business constitutes 20% or more of ChampionX’s consolidated net revenues, net income, EBITDA or assets, (C) commences a tender offer or exchange offer that, if consummated, would result in any person beneficially owning 20% or more of any class of equity securities of ChampionX or any of its subsidiaries whose business constitutes 20% or more of ChampionX’s consolidated net revenues, net income, EBITDA or assets, or (D) directly or indirectly commences any merger, consolidation, business combination, joint venture, partnership, recapitalization, liquidation, dissolution or similar transaction involving ChampionX or any of its subsidiaries whose business constitutes 20% or more of ChampionX’s consolidated net revenues, net income, EBITDA or assets.

 

101


Table of Contents

In connection with ChampionX’s entry into the Merger Agreement, the ChampionX Board unanimously resolved to recommend that ChampionX’s stockholders adopt the Merger Agreement (the “ChampionX Recommendation”). Subject to certain limited exceptions, neither the ChampionX Board nor any committee thereof may:

 

   

withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the ChampionX Recommendation in a manner adverse to SLB;

 

   

approve, adopt, authorize, resolve or recommend, or propose to approve, adopt, authorize, resolve or recommend, or allow ChampionX or any of its subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar contract or any tender or exchange offer providing for, with respect to, or in connection with, any ChampionX Acquisition Proposal;

 

   

fail to reaffirm the ChampionX Recommendation within 10 business days of a written request therefor by SLB following the date on which any ChampionX Acquisition Proposal or material modification thereto is received by ChampionX or is published, sent or communicated to ChampionX’s stockholders (or, if the ChampionX Special Meeting is scheduled to be held within 10 business days of such request, within five business days after such request and, in any event, prior to the date of the ChampionX Special Meeting); or

 

   

fail to publicly announce within 10 business days after a tender offer or exchange offer relating to the securities of ChampionX has been commenced, a statement disclosing that the ChampionX Board recommends rejection of such tender offer or exchange offer and affirms the ChampionX Recommendation (such actions, collectively, a “Change of Recommendation”).

At any time prior to receipt of the ChampionX Stockholder Approval, the ChampionX Board may, however, make a Change of Recommendation, if (and only if):

 

   

(A) a written ChampionX Acquisition Proposal that did not result from a material breach of ChampionX’s non-solicitation obligations under the Merger Agreement is made by a third party after entry into the Merger Agreement, and such ChampionX Acquisition Proposal is not withdrawn, (B) the ChampionX Board determines in good faith after consultation with its financial advisors and outside legal counsel that such ChampionX Acquisition Proposal constitutes a Superior Offer and (C) following consultation with outside legal counsel, the ChampionX Board determines that the failure to make a Change of Recommendation would constitute a breach of its fiduciary duties under applicable law or ChampionX’s second amended and restated certificate of incorporation or amended and restated by-laws; and

 

   

(A) ChampionX provides SLB four business days’ prior written notice of its intention to take such action, (B) after providing such notice and prior to making such Change of Recommendation in connection with a Superior Offer, ChampionX has negotiated in good faith with SLB during such four business day period to make such revisions to the terms of the Merger Agreement, such that the ChampionX Acquisition Proposal ceases to constitute a Superior Offer, and (C) the ChampionX Board has considered in good faith any changes to the terms of the Merger Agreement committed to in writing by SLB, and following such four business day period, has determined in good faith, after consultation with its outside legal counsel and financial advisors, that the ChampionX Acquisition Proposal would continue to constitute a Superior Offer if such changes to the Merger Agreement proposed in writing by SLB were to be given effect.

 

102


Table of Contents

Additionally, other than with respect to a Superior Offer, nothing in the Merger Agreement will prohibit or restrict the ChampionX Board from making a Change of Recommendation in response to an Intervening Event to the extent that:

 

   

the ChampionX Board or any committee thereof determines in good faith, after consultation with ChampionX’s outside legal counsel, that the failure of the ChampionX Board to effect a Change of Recommendation in response to such Intervening Event would constitute a breach of its fiduciary duties under applicable law or ChampionX’s second amended and restated certificate of incorporation or amended and restated by-laws; and

 

   

(A) ChampionX provides SLB four business days’ prior written notice of its intention to take such action, which notice will specify the reasons therefor, (B) after providing such notice and prior to making such Change of Recommendation, ChampionX has negotiated in good faith with SLB during such four business day period to make such revisions to the terms of the Merger Agreement as to obviate the need for the ChampionX Board to make a Change of Recommendation, and (C) the ChampionX Board or any committee thereof has considered in good faith any changes to the terms of the Merger Agreement committed to in writing by SLB, and following such four business day period, has determined in good faith, after consultation with its outside legal counsel and financial advisors, that the failure to effect a Change of Recommendation in response to such Intervening Event would constitute a breach of its fiduciary duties under applicable law or ChampionX’s second amended and restated certificate of incorporation or amended and restated by-laws.

The term “Superior Offer” means any bona fide offer or proposal received from or made public by a third party (other than an offer, proposal or indication of interest by SLB, Holdco, Merger Sub or their respective subsidiaries) relating to any transaction or series of related transactions (other than the Transactions) pursuant to which any person, other than SLB, Holdco, Merger Sub or their respective affiliates, (A) directly or indirectly acquires beneficial ownership, or the right to acquire beneficial ownership, of any business or assets of ChampionX or any of its subsidiaries whose business constitutes 50% or more of ChampionX’s consolidated net revenues, net income, EBITDA or assets, (B) directly or indirectly acquires or purchases 50% or more of any class of equity securities of ChampionX or any of its subsidiaries whose business constitutes 50% or more of ChampionX’s consolidated net revenues, net income, EBITDA or assets, (C) commences a tender offer or exchange offer that, if consummated, would result in any person beneficially owning 50% or more of any class of equity securities of ChampionX or any of its subsidiaries whose business constitutes 50% or more of ChampionX’s consolidated net revenues, net income, EBITDA or assets, or (D) directly or indirectly commences any merger, consolidation, business combination, joint venture, partnership, recapitalization, liquidation, dissolution or similar transaction involving ChampionX or any of its subsidiaries whose business constitutes 50% or more of ChampionX’s consolidated net revenues, net income, EBITDA or assets on terms that the ChampionX Board or any committee thereof determines, in good faith, after consultation with its outside legal counsel and its financial advisor is (1) if accepted, reasonably likely to be consummated and (2) more favorable to the ChampionX stockholders than the Transactions taking into account at the time of determination any proposal by SLB to amend or modify the terms of the Merger Agreement committed to in writing and after taking into account all aspects of the ChampionX Acquisition Proposal, including the form of consideration, the adequacy and conditionality of any financing, and the timing and likelihood of consummation.

The term “Intervening Event” means any event, change, effect, development or occurrence regarding ChampionX and its subsidiaries that is not known or reasonably foreseeable (or if known or reasonably foreseeable, the material consequences of which were not known or reasonably foreseeable), to or by the ChampionX Board, as the case may be, as of the date of the Merger Agreement, except that such event, change, effect, development or occurrence will not constitute an Intervening Event if such event, change, effect, development or occurrence results from or arises out of (A) the announcement or the existence of, compliance with or performance under the Merger Agreement or the Transactions (including the impact thereof on the relationships, contractual or otherwise, with employees, labor unions, customers, suppliers or partners, and including any lawsuit, action or other proceeding with respect to the Transactions), (B) any ChampionX

 

103


Table of Contents

Acquisition Proposal, (C) certain alternate transactions as described in the Merger Agreement or (D) any Superior Offer.

Regulatory Approvals. Each of the parties to the Merger Agreement has agreed to use (and to cause each of its controlled affiliates to use) its reasonable best efforts to take, or cause to be taken, promptly all actions, and to do, or cause to be done, promptly and to assist and cooperate with the other parties in doing, all things necessary, proper and advisable under applicable laws to consummate the Merger and the other Transactions, including using reasonable best efforts to obtain all necessary actions or nonactions, waivers, clearances, expiration or termination of applicable waiting periods, consents and approvals, from governmental entities and make all necessary registrations, notifications and filings and take other steps as may be necessary to obtain an action or nonaction, waiver, clearance, expiration or termination of applicable waiting periods, consent or approval from, or to avoid an action or proceeding by, any governmental entity, in each case as promptly as practicable, and obtain all necessary nonactions, consents, approvals or waivers from third parties other than any governmental entity, in each case as promptly as practicable.

Subject to the terms and conditions set forth in the Merger Agreement, each of SLB and ChampionX have further agreed to, as promptly as practicable, prepare and file all filings, requests, registrations and notices necessary under each specified regulatory law with respect to the Merger and the Transactions. Subject to certain limited exceptions, each of ChampionX, on the one hand, and SLB, on the other hand, have agreed to (i) make available to the other party such information as the other party may reasonably request in order to make such regulatory filings, (ii) respond to information or document requests by any relevant governmental entity in connection with the Transactions, including by providing any information requested by any such governmental entity, (iii) keep each other party apprised of the status of matters relating to the consummation of the Transactions, (iv) cooperate in all respects and consult with the other party in connection with obtaining all necessary actions or nonactions, waivers, clearances, expiration or termination of applicable waiting periods, consents and approvals, from governmental entities, (v) prior to transmitting any communications, advocacy, white papers, information responses or other submissions to any governmental entity in connection with the Merger or the Transactions, permit counsel for the other party a reasonable opportunity to review and provide comments thereon, and consider in good faith the views of the other party in connection therewith, and (vi) not, and cause its affiliates not to, participate in any substantive meeting or discussion with any governmental entity in connection with the Merger or Transactions unless it consults with the other party in advance and gives the other party the opportunity to attend and participate.

Pursuant to the Merger Agreement, SLB and its affiliates have agreed to use their reasonable best efforts, subject to certain limitations, to resolve any objections and avoid or eliminate each impediment that a governmental entity (other than CFIUS) may assert under applicable regulatory laws with respect to the Transactions to enable the consummation of the Merger to occur as promptly as practicable following the date of the Merger Agreement (and in any event no later than the End Date). However, SLB and its affiliates will not be obligated to take remedial actions for purposes of resolving any such objection or avoiding or eliminating any such impediment, except to the extent that such remedial action: (i) does not involve any businesses, assets, equity interests, product lines, properties, contracts, agreements, commercial arrangements, relationships, ventures, rights or obligations of SLB or its affiliates or the Chemical Technologies business of ChampionX and its subsidiaries and (ii) would not, and would not reasonably be expected to, individually or in the aggregate, result in a loss of more than 8% of the aggregate annual revenues of ChampionX and its subsidiaries, taken as a whole, as measured by the 12 months ended December 31, 2023. ChampionX has agreed not to, and to cause its controlled affiliates not to, propose, offer, negotiate, commit to, agree to, effect or take any remedial action without the prior written consent of SLB. Additionally, ChampionX has agreed to, and to cause its controlled affiliates to, take any remedial action as directed by SLB (conditioned, in each case, upon the closing).

Other than with respect to CFIUS Approval (as defined below), SLB will, upon reasonable consultation with ChampionX, control, lead and direct all actions, decision and strategy for, and make all final determinations as to the timing and appropriate course of action with respect to, (i) obtaining clearances, expirations or terminations of waiting periods, consents and approvals from governmental entities, and all other matters related to regulatory laws and related inquiries, negotiations and actions, in connection with the Transactions, and (ii) responding to

 

104


Table of Contents

and defending any action by or with any governmental entity in connection with the Transactions. Additionally, other than with respect to CFIUS Approval, SLB will retain sole discretion in deciding whether to litigate, defend against, or otherwise contest any action by any governmental entity relating to the Transactions pursuant to or under the antitrust laws of the United States. ChampionX has agreed to, and to cause its affiliates to, use its reasonable best efforts to provide full and effective support of SLB in all material respects in all such inquiries, negotiations and actions to the extent requested by SLB. Further, SLB, ChampionX and their respective affiliates have agreed to not enter into any timing agreement or similar agreement with any governmental entity, or extend any waiting period under any regulatory law, if such action would reasonably be expected to delay the consummation of the Transactions beyond the End Date.

Other than with respect to obtaining CFIUS Approval, SLB, Holdco, Merger Sub and ChampionX have agreed not to, and to cause their respective affiliates not to, acquire or agree to acquire equity or assets of, or other interests in, or merge or consolidate with (or agree to merge or consolidate with), any person, or any business unit, division, subsidiary or other portion of any person, if such action would reasonably be expected to (i) materially increase the risk of a governmental entity or law prohibiting, preventing, restricting, or otherwise making unlawful the consummation of the Transactions, (ii) materially delay the satisfaction of the conditions to the closing or (iii) otherwise prevent or materially delay the consummation of the Transactions.

CFIUS Approval. Each of SLB and ChampionX have agreed to, and to cause their respective subsidiaries to, use reasonable best efforts to obtain CFIUS Approval if SLB determines in its sole and absolute discretion that CFIUS Approval is required under Section 721 of the Defense Production Act of 1950, as amended, and all rules and regulations issued and effective thereunder (the “DPA”) or otherwise warranted. The term “CFIUS Approval” means (A) the parties have received written notice from CFIUS that: (1) CFIUS has concluded that none of the Transactions is a “covered transaction” as defined in the DPA; (2) CFIUS has issued a written notice that it has completed an assessment, review or investigation pursuant to the DPA with respect to the Transactions, and has concluded all action under the DPA; or (3) CFIUS has determined that it is not able to conclude action under the DPA with respect to the Transactions pursuant to a declaration submitted by the parties but has not requested the submission of a notice filing with respect to the Transactions; or (B) CFIUS has sent a report to the President of the United States requesting the President’s decision and (1) the President has announced a decision not to take any action to suspend or prohibit the Transactions or (2) having received a report from CFIUS requesting the President’s decision, the President has not announced or taken any action after 15 days from the earlier of the date the President received such report from CFIUS or the end of the investigation period. The determination as to whether CFIUS Approval is required under the DPA or is otherwise warranted must be made within 10 business days following the date on which SLB receives such information from ChampionX as is reasonably necessary to make such determination. If SLB determines in its sole and absolute discretion that CFIUS Approval is required under the DPA or otherwise warranted, neither SLB nor ChampionX may take, or cause any of their respective affiliates to take, any action that would reasonably be expected to prevent, materially delay or materially impede the receipt of CFIUS Approval. Neither SLB nor any of its affiliates will be required, for purposes of resolving any objection or avoiding or eliminating any impediment, if any, that CFIUS may assert with respect to the Transactions, to take any remedial actions with respect thereto.

Employee Matters. Following the Effective Time and until the first anniversary of the closing date (or, if earlier, until the date of termination of employment of the relevant employee), SLB has agreed to provide (or cause its subsidiaries to provide) the individuals who are employed by ChampionX or any of its subsidiaries immediately before the Effective Time and who immediately following the closing date continue employment (the “Current Employees”) with (i) annual base salary or wages (as applicable) that are no less favorable than the annual base salary or wages (as applicable) provided to such Current Employees immediately prior to the Effective Time, (ii) short-term target cash bonus or other short-term target cash incentive opportunities (other than any retention or transaction bonuses or incentives) that are no less favorable than the short-term target cash bonus or other short-term target cash incentive opportunities (as applicable) provided to such Current Employees immediately prior to the Effective Time, (iii) long-term incentive compensation opportunities that are no less favorable than the long-term incentive compensation opportunities provided to such Current Employees immediately prior to

 

105


Table of Contents

the Effective Time, (iv) severance benefits that are no less favorable than those the severance benefits mutually specified between the parties and (v) employee benefits (other than any defined benefit pension, nonqualified deferred compensation, retention or transaction benefits, equity or equity-based compensation and post-termination or retiree health or welfare benefits), that are no less favorable in the aggregate than the employee benefits (subject to the same exclusions) provided to such Current Employees immediately prior to the Effective Time.

For purposes of vesting of defined contribution retirement benefits, eligibility to participate and, solely for vacation and paid time off policies, severance plans and policies, and disability plans and policies, determining levels of benefits (but not, for the avoidance of doubt, for any purposes, including benefit accrual, under any defined benefit pension plan) under the employee benefit plans of SLB and its subsidiaries providing benefits to any Current Employees after the Effective Time, each Current Employee will be credited with such Current Employee’s years of service with ChampionX and its subsidiaries and their respective predecessors before the Effective Time, to the same extent and for the same purpose as such Current Employee was entitled, before the Effective Time, to credit for such service under any analogous ChampionX benefit plan in which such Current Employee participated immediately prior to the Effective Time, provided that the foregoing will not apply to the extent that it would result in a duplication of benefits or coverage with respect to the same period of service. In addition, effective as of the Effective Time and thereafter, for the plan year in which the closing occurs, SLB and its subsidiaries have agreed to (or to cause the Surviving Corporation to) (i) cause any pre-existing conditions or limitations, eligibility waiting periods, actively at work requirements, evidence of insurability requirements or required physical examinations under any corresponding group health plan of the Surviving Corporation, SLB or any of their respective subsidiaries to be waived with respect to Current Employees and their eligible dependents and (ii) fully credit each Current Employee with all deductible payments, co-insurance and other out-of-pocket expenses incurred by such Current Employee and such employee’s covered dependents under the corresponding group health benefit plans of ChampionX or its subsidiaries prior to the closing for the purpose of determining the extent to which such Current Employee has satisfied the deductible, co-insurance, or maximum out-of-pocket requirements applicable to such Current Employee and such employee’s covered dependents for such plan year under any corresponding benefit plan of the Surviving Corporation, SLB or any of their respective subsidiaries, as if such amounts had been paid in accordance with such plan.

If timely requested by SLB in writing, ChampionX and each of its subsidiaries have agreed to take all corporate action as is necessary to terminate each 401(k) plan maintained or sponsored by ChampionX or any of its subsidiaries (collectively, the “ChampionX 401(k) Plans”), in each case, effective as of the day immediately prior to the closing date. In the event of the termination of any ChampionX 401(k) Plan, each Current Employee will be eligible (subject to the satisfaction of certain specified eligibility requirements) to participate in a defined contribution plan that is qualified under Section 401(a) of the Code that includes a cash or deferred arrangement within the meaning of Section 401(k) of the Code and that is established or maintained by SLB or its applicable subsidiary (an “SLB 401(k) Plan”) and SLB or its applicable subsidiary will use commercially reasonable efforts to cause the SLB 401(k) Plan to immediately accept eligible rollover distributions (as defined in Section 402(c)(4) of the Code) from current and former employees of ChampionX and its subsidiaries with respect to such individuals’ account balances (including loans) under such terminated ChampionX 401(k) Plan if elected by any such individuals.

ChampionX Financing Cooperating. Prior to the closing, and subject to certain limited exceptions, ChampionX has agreed to use commercially reasonable efforts to cooperate (and to cause its subsidiaries and its and their respective representatives to use their respective commercially reasonable efforts to cooperate) with SLB (as reasonably requested by SLB) to the extent reasonably necessary in connection with any debt financing incurred or intended to be incurred in connection with the Transactions by SLB or its subsidiaries (the “Financing”). SLB has agreed, subject to certain limited exceptions, to reimburse ChampionX upon its request for all reasonable and documented out-of-pocket third-party costs incurred by ChampionX or its subsidiaries in connection with such cooperation and to indemnify ChampionX, its subsidiaries and their respective affiliates and representatives against any and all losses suffered or incurred by them in connection with the arrangement of the Financing and any information utilized in connection therewith.

 

106


Table of Contents

Indemnification and Insurance. For a period of six years from the Effective Time, the Surviving Corporation will maintain in effect any and all exculpation, indemnification and advancement of expenses provisions of ChampionX’s and any of its subsidiaries’ organizational documents or in any indemnification agreements of ChampionX or its subsidiaries with any of their respective current or former directors, officers or employees, in each case as in effect as of the date of the Merger Agreement, and no such provision shall be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder of any individuals who immediately before the Effective Time were current or former directors, officers or employees of ChampionX or any of its subsidiaries. In addition, subject to certain limited exceptions, from and after the Effective Time, the Surviving Corporation and its subsidiaries will jointly and severally, to the fullest extent permitted under applicable law, indemnify and hold harmless (and advance funds in respect of each of the foregoing) each current and former director, officer or employee of ChampionX or any of its subsidiaries and each person who served as a director, officer, member, trustee or fiduciary of another entity or enterprise at the request or for the benefit of ChampionX or any of its subsidiaries against any costs or expenses in advance of the final disposition of any claim, suit, proceeding or investigation to the fullest extent permitted by applicable law.

For a period of six years from the Effective Time, the Surviving Corporation will also cause to be maintained in effect the coverage provided by the policies of directors’ and officers’ liability insurance and fiduciary liability insurance in effect as of the date of the Merger Agreement by ChampionX and its subsidiaries with respect to matters existing or arising on or before the Effective Time, except that the Surviving Corporation will not be required to pay annual premiums in excess of 300% of the last annual premium paid by ChampionX prior to the date of the Merger Agreement in respect of the coverage. In lieu of the foregoing, SLB or ChampionX may (and at the request of SLB, ChampionX will be required to use its commercially reasonable efforts to) obtain, at or prior to the Effective Time, a six-year “tail” policy under ChampionX’s existing directors’ and officers’ insurance policy providing no less favorable coverage to that described above if and to the extent that the same may be obtained for an amount that, in the aggregate, does not exceed 300% of the last annual premium paid by ChampionX prior to the date of the Merger Agreement in respect of such coverage. If a “tail policy” is purchased, the Surviving Corporation must maintain such policy in full force and effect for such six-year period.

Listing of SLB Common Stock and Delisting and Deregistration of ChampionX Common Stock. SLB will use reasonable best efforts to cause the SLB common stock to be issued and delivered in the Merger and such other SLB common stock to be reserved for issuance in connection with the Merger to be approved for listing on the NYSE, subject to official notice of issuance. If the Merger is completed, shares of ChampionX common stock will be delisted from Nasdaq, will be deregistered under the Exchange Act and will cease to be publicly traded.

Mutual Access. For purposes of integration planning and the consummation of the Transactions, each of ChampionX, on the one hand, and SLB, Holdco and Merger Sub, on the other hand, have agreed to afford the other party and its specified representatives reasonable access during normal business hours and upon reasonable advance notice, throughout the period prior to the earlier of the Effective Time and the date on which the Merger Agreement is terminated in accordance with its terms, to its and its subsidiaries’ properties, contracts, commitments, books and records as the other party may reasonably request.

Public Announcements. From the date of the Merger Agreement until the earlier of the Effective Time and the date on which the Merger Agreement is terminated in accordance with its terms, SLB and ChampionX have agreed to use reasonable best efforts to develop a joint communications plan and to ensure that all press releases and other public statements with respect to the Transactions, to the extent they have not been previously issued or disclosed, are consistent with such joint communications plan. Further, unless otherwise required by applicable law or as specified in the Merger Agreement, neither ChampionX, on the one hand, nor any of SLB, Holdco and Merger Sub, on the other hand, may issue any press release or public statement with respect to the Merger without the other’s prior consent (such consent not to be unreasonably withheld, conditioned or delayed).

Stockholder Litigation. SLB, Holdco and Merger Sub, on one hand, and ChampionX, on the other hand, have agreed to promptly notify the other in writing of any stockholder litigation or other litigation or proceedings

 

107


Table of Contents

brought or threatened in writing against it or its directors or executive officers or other representatives relating to the Merger Agreement or the Transactions. Additionally, ChampionX has agreed to not cease to defend, consent to the entry of any judgment, settle or offer to settle or take any other material action with respect to any such litigation or proceeding without the prior written consent of SLB (which consent may not be unreasonably withheld, delayed or conditioned).

Notice of Changes. Each of SLB and ChampionX have agreed to promptly notify the other party of its actual knowledge of any occurrence or development that has had or would reasonably be expected to have, either individually or in the aggregate, a material adverse effect on such party.

Conditions to the Merger

The respective obligations of each party to effect the Merger will be subject to the fulfillment of the following conditions at or prior to the Effective Time:

 

   

receipt of the ChampionX Stockholder Approval;

 

   

the approval for listing on the NYSE of the SLB common stock to be issued pursuant to be issued as Equity Consideration pursuant to the Merger, subject to official notice of issuance;

 

   

the absence of any Mutual Legal Restraint;

 

   

the expiration or termination of all waiting periods (and any extensions thereof) under the HSR Act applicable to the Transactions any commitment to, or agreement with, any governmental entity to delay the consummation of, or not to consummate before a certain date, the Transactions and the receipt of all clearances, consents and approvals under certain specified antitrust regulatory laws in Australia, Brazil, Canada, Mexico, New Zealand, Norway, Saudi Arabia and the United Kingdom;

 

   

if determined by SLB to be required or warranted, the receipt of the CFIUS Approval; and

 

   

the effectiveness of the registration statement of which this proxy statement/prospectus is a part, and the absence of any stop order or proceeding seeking a stop order relating to such effectiveness.

Additional Conditions to the Obligations of ChampionX. Unless waived by ChampionX, the obligation of ChampionX to effect the Merger is subject to the satisfaction at or prior to the Effective Time of the following additional conditions:

 

   

representations and warranties of SLB, Holdco and Merger Sub contained in the Merger Agreement being true and correct as of the date of the Merger Agreement and as of the closing date, except where the failure of such representations to be so true and correct has not had or would not reasonably be expected to have, in the aggregate, a material adverse effect;

 

   

SLB, Holdco, and Merger Sub’s performance or compliance in all material respects with all of its covenants or agreements required to be performed or complied with under the Merger Agreement; and

 

   

receipt by ChampionX of a certificate signed by the Chief Executive Officer or another senior officer of SLB, certifying to the effect that the conditions specified in the preceding two bullets have been satisfied.

Additional Conditions to the Obligations of SLB. Unless waived by SLB, the obligations of SLB, Holdco, and Merger Sub to effect the Merger are subject to the satisfaction at or prior to the Effective Time of the following additional conditions:

 

   

representations and warranties of ChampionX contained in the Merger Agreement being true and correct as of the date of the Merger Agreement and as of the closing date, except where the failure of such representations to be so true and correct has not had or would not reasonably be expected to have, in the aggregate, a material adverse effect;

 

108


Table of Contents
   

performance in all material respects by ChampionX of all of its covenants and agreements required to be performed by it under the Merger Agreement at or prior to the closing date;

 

   

receipt by SLB of a certificate signed by the Chief Executive Officer or another senior officer of ChampionX, certifying to the effect that the conditions specified in the preceding two bullets have been satisfied; and

 

   

the (i) absence of a Specified Legal Restraint, (ii) absence of an investigation of the Transactions under the specified regulatory laws referred to in clause (i), (iii) expiration or termination of all waiting periods (and any extensions thereof) applicable following SLB’s determination to submit a Specified Regulatory Filing and any agreement with any governmental entity to delay the consummation of, or not to consummate before a certain date, the Transactions, (iv) receipt of all clearances, consents and approvals required under the Specified Regulatory Filings, and (v) absence of any regulatory law entered, issued, enforced, promulgated, adopted or effective after the date of the Merger Agreement (A) that enjoins, prohibits, prevents or makes illegal consummation of the Transactions, (B) pursuant to which an investigation of the Transactions will have been commenced and be continuing, (C) under which an applicable waiting period (or extensions thereof) with respect to the Transactions or any commitment to, or agreement with, any governmental entity to delay the consummation of, or not to consummate before a certain date, the Transactions, will be continuing, or (D) under which any required clearance, consent or approval required will not have been obtained or fail to remain in full force and effect.

Termination; Amendment and Waiver

Termination. The Merger Agreement may be terminated in accordance with its terms at any time prior to the Effective Time, notwithstanding the adoption of the Merger Agreement by ChampionX’s stockholders (except as described below):

 

   

by mutual written agreement of SLB and ChampionX;

 

   

by either SLB or ChampionX if:

 

   

the Merger has not occurred on or before the End Date; however, neither party may terminate the Merger Agreement under this provision if that party’s material breach of any provision of the Merger Agreement has been the cause of, or resulted in, the failure of the Merger to occur on or before the End Date;

 

   

closing would violate any final and non-appealable Mutual Legal Restraint; however, neither party may terminate the Merger Agreement under this provision if that party’s failure to perform any of its obligations under the Merger Agreement contributed, in any material respect, to the issuance or continued existence of such Mutual Legal Restraint;

 

   

the ChampionX stockholders do not approve the Merger Proposal at the ChampionX Special Meeting or any adjournment or postponement of the ChampionX Special Meeting;

 

   

by ChampionX if:

 

   

SLB, Holdco, or Merger Sub is in breach of its representations or warranties or failed to perform its covenants or other agreements contained in the Merger Agreement such that the conditions to the Merger Agreement would not be satisfied and such breach (A) is not cured within 30 days following written notice thereof to SLB, (B) by its nature or timing cannot be cured during such period, or (C) is not curable prior to the End Date;

 

   

by SLB if:

 

   

ChampionX is in breach of its representations or warranties or failed to perform its covenants or other agreements contained in the Merger Agreement such that the conditions to the Merger

 

109


Table of Contents
 

Agreement would not be satisfied and such breach (A) is not cured within 30 days following written notice thereof to ChampionX, (B) by its nature or timing cannot be cured during such period, or (C) is not curable prior to the End Date;

 

   

the ChampionX Board has made a Change of Recommendation prior to receipt of the ChampionX Stockholder Approval; or

 

   

closing would violate any final and non-appealable Specified Legal Restraint; however, SLB may not terminate the Merger Agreement under this provision if its failure to perform any of its obligations under the Merger Agreement contributed, in any material respect, to the issuance or continued existence of such Specified Legal Restraint.

Termination Fees. The Merger Agreement also provides for the payment of a termination fee by ChampionX to SLB if the agreement is terminated in specified circumstances. ChampionX will be obligated to pay SLB a $265.4 million termination fee if:

 

   

prior to the ChampionX Special Meeting, a ChampionX Acquisition Proposal (except that all references to 20% in such definition shall be changed to 50%) is publicly disclosed after the date of the Merger Agreement;

 

   

the Merger Agreement is terminated because (A) the Merger Agreement has not been consummated on or prior to the End Date, (B) a vote on the Merger Proposal by ChampionX stockholders has not yielded approval, or (C) ChampionX has breached its representations or warranties or failed to perform its covenants or other agreements contained in the Merger Agreement such that the conditions to the Merger Agreement would not be satisfied and such breach (1) is not cured within 30 days following written notice thereof to SLB, (2) by its nature or timing cannot be cured during such period, or (3) is not curable prior to the End Date, and such breach was a result ChampionX’s failure to convene and hold the ChampionX Special Meeting in violation of the Merger Agreement or a breach of ChampionX’s non-solicitation and “no shop” obligations;

 

   

such ChampionX Acquisition Proposal (except that all references to 20% in such definition shall be changed to 50%) has not been withdrawn prior to termination; and

 

   

within 12 months after such termination, ChampionX consummates or enters into a definitive agreement to consummate an alternative transaction.

The Merger Agreement provides for the payment of a termination fee by SLB to ChampionX if the agreement is terminated in specified circumstances. SLB will be obligated to pay ChampionX a $326.6 million termination fee if the agreement is terminated:

 

   

by either party because the Merger Agreement has not been consummated on or prior to the End Date and, subject to certain exceptions, parties will have satisfied conditions to the Merger;

 

   

by either party because closing would violate any final and non-appealable Mutual Legal Restraint; however, neither party may terminate the Merger Agreement under this provision if that party’s failure to perform any of its obligations under the Merger Agreement contributed, in any material respect, to the issuance or continued existence of such Mutual Legal Restraint; or

 

   

by SLB if the Merger Agreement has not been consummated on or prior to the End Date and it does not exercise its right to an Election Extension.

Miscellaneous

Specific Performance. The parties have agreed that in no event will SLB, Holdco or Merger Sub on the one hand, or ChampionX, on the other hand, be entitled to specific performance to cause the other party to consummate the Transactions and payment of the termination fee, as applicable.

 

110


Table of Contents

Amendment; Waiver. At any time prior to the Effective Time, any provision of the Merger Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by ChampionX, SLB, Holdco, and Merger Sub or, in the case of a waiver, by the party against whom the waiver is to be effective; provided, however, that after receipt of ChampionX Stockholder Approval, if any such amendment or waiver will by applicable law require further approval of ChampionX stockholders or SLB shareholders, as applicable, the effectiveness of such amendment or waiver will be subject to the approval of ChampionX stockholders or SLB shareholders, as applicable.

 

111


Table of Contents

COMPARISON OF STOCKHOLDER RIGHTS

As a result of the Merger, holders of ChampionX common stock will become SLB shareholders, and the rights of the former ChampionX stockholders will thereafter be governed by SLB’s articles of incorporation and amended and restated by-laws and the Curaçao Civil Code, which we refer to in this discussion as Curaçao law. The rights of ChampionX stockholders are currently governed by ChampionX’s second amended and restated certificate of incorporation and amended and restated by-laws and the General Corporation Law of the State of Delaware, which we refer to in this discussion as Delaware law.

The following summarizes certain differences between the current rights of ChampionX stockholders and the current rights of SLB shareholders. These differences arise in part from the differences between Curaçao law and Delaware law. Additional differences arise from the differences between governing documents of the two companies.

Although it is impracticable to compare all of the aspects in which Curaçao law and Delaware law and SLB’s and ChampionX’s governing documents differ with respect to stockholder rights, the following discussion summarizes the material differences between them. This summary is not intended to be a complete statement of the rights of stockholders of the two companies or a complete description of the specific provisions referred to below. The summary is qualified in its entirety by reference to Curaçao law, Delaware law, SLB’s articles of incorporation and amended and restated by-laws and ChampionX’s second amended and restated certificate of incorporation and amended and restated by-laws. You are encouraged to carefully read this entire proxy statement/prospectus, the relevant provisions of Curaçao law and Delaware law and the other documents to which SLB and ChampionX refer in this proxy statement/prospectus for a more complete understanding of the differences between the rights of an SLB shareholder and the rights of a ChampionX stockholder. SLB and ChampionX have filed with the SEC their respective governing documents referenced in this comparison of stockholder rights. To find out where copies of these documents can be obtained, see the section entitled “Where You Can Find More Information.”