Hanover Compressor acquires Schlumberger gas compression business
June 29, 2001
By the OGJ Online Staff
HOUSTON, June 29 -- Hanover Compressor Co., Houston, will acquire the natural gas compression business and related assets of Schlumberger Ltd., New York City, for up to $761 million in cash and stock.
Schlumberger will own 10% of Hanover Compressor.
The transaction includes ownership of Schlumberger's Production Operators Corp. business and ownership interests in certain gas compression and gas handling joint venture projects in South America.
It also includes an agreement for a joint business development effort, said Hanover.
Hanover will pay Schlumberger $270 million in cash, $150 million in a long-term subordinated note, and newly issued Hanover shares with a nominal value of $283 million. Schlumberger will be entitled to receive a distribution of up to $58 million from one of the joint ventures to be acquired by Hanover.
The 5-year alliance agreement requires Hanover to add a Schlumberger representative to its board of directors. Schlumberger will hold its stake in Hanover for at least 3 years, but will not acquire more than 25% of Hanover for that period.
Hanover said it believes the deal will add revenue of $200 million/year within 1 year.
