Schlumberger Snaps Up Smith

Oil services firm will buy smaller player in $11B deal.

Rumors of an impending takeover sent shares of oil well services firm Smith International soaring Friday, and the offiical announcement of the deal meant more of the same on Monday.
The maker of products used during drilling for oil and natural gas was still riding high after Schlumberger announced the takeover, valued at more than $11 billion.forbes:http://www.forbes.com/2010/02/22/schlumberger-smith-international-Schlumberger paid a significant premium in the stock-for-stock deal, which values shares of Smith International at $45.84, a 37.5% premiium to the closing price Feb. 18. The deal signifies an effort to diversify its holdings amid competition with the likes of Halliburton .

With shares of Schlumberger down 3.6% to $61.62 Monday the deal, which offers 0.6966 shares of Schlumberger for each Smith share, was worth $42.92 a share. Smith was trading at $41.10, a 9% gain on the session but 4.2% below the offer price.
"Smith’s drilling technologies, other products and expertise complement our own, while the geographical footprint of Schlumberger means we can extend our joint offerings worldwide," said Schlumberger CEO Andrew Gould.

The two companies have a joint venture hydrocarbon exploration and supply company M-I Swaco. Schlumberger expects to close the deal in late 2010 and see pre-tax synergies of $160 million in 2011.