Did anyone see this -- announced after the market closed? It looks like real good news for Smith, and could explain recent strength. Any comments?
Bloomberg News
October 21, 1998, 6:19 p.m. PT
Schlumberger, Smith Intl Form Drilling Fluids Joint Venture
New York, Oct. 21 (Bloomberg) -- Schlumberger Ltd. and Smith
International Inc. agreed to combine their units that make fluids
used in oil drilling in a joint venture that will have about $1.3
billion in annual revenue.
The transaction, which is expected to close in the first
quarter of next year, combines Smith's M-I LLC fluids business,
including M-I Swaco, and Schlumberger's drilling fluids unit. New
York-based Schlumberger will pay Smith $280 million in cash and
own a 40 percent stake in the venture, which will operate as
M-I LLC.
M-I LLC sells muds and chemicals used to stabilize and
lubricate oil wells.
Houston-based Smith gained 100 percent of M-I LLC earlier
this year after Haliburton Co. sold its 36 percent interest to
win European Commission approval of its acquisition of Dresser
Industries Inc.
The joint-venture agreement is subject to a definitive
agreement and to approval by regulators and the companies'
boards.
Shares in Schlumberger rose 1 5/8 to 52 1/2 and Smith
International rose 2 3/16 to 32 13/16. The venture was announced
after the close of U.S. markets.
--Courtney Schlisserman in the New York newsroom (212) 318-2300
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