Schlumberger Limited announced the signing of a binding agreement with Atos Origin for the sale of the majority of SchlumbergerSema businesses.
The transaction proceeds would amount to approximately $1.5 billion consisting of EUR400 million in cash and a fixed number of 19.3 million of Atos Origin common shares that represent approximately 29% of the common shares outstanding of Atos Origin. Subsequent to closing, Schlumberger expects to reduce its ownership in Atos Origin to 19% following which Schlumberger intends to account for this investment under the cost method. The closing, which is expected in January 2004, is subject to Atos Origin shareholder approval, customary regulatory approvals, the employee information and consultation process, and other conditions. Using the Atos Origin stock price and US dollar Euro exchange rate as of Friday, September 19th, Schlumberger expects no impairment charge to earnings for the third quarter as a result of this transaction, though facts and market conditions could alter this conclusion for this quarter and future reporting periods.
Commenting on this transaction, Andrew Gould, Chairman and Chief Executive Officer, said: “The future for Schlumberger services to the upstream oil and gas industry is exceptionally bright as the world adds new supply capacity to meet demand and replace production from aging hydrocarbon reservoirs. Key amongst the techniques required to enhance hydrocarbon recovery will be the information technologies that enable real-time reservoir description, monitoring and management.
Schlumberger has the fundamental IT knowledge needed and will address these opportunities through the expanded Schlumberger Information Solutions operating unit that is part of Schlumberger Oilfield Services. The activities of this unit include technical consulting, information management and Exploration & Production (E&P) software augmented by E&P business process optimization together with secure worldwide network connectivity from sub-surface to desktop.”
Gould further stated:
“The global IT services industry is going through an important phase of consolidation and the combination of the SchlumbergerSema IT businesses with Atos Origin will create a leading European IT Services company with broad presence and competence across the world.” Schlumberger will retain a number of specific SchlumbergerSema businesses that include Business Continuity, Infodata – a Swedish database company – and all software products related to the SchlumbergerSema telecommunications activity. These, together with smart cards, point-of-sale terminals, payment systems, eCity terminals and payphones are being considered for divestiture or IPO. Schlumberger Limited also announced charges to be taken in the third quarter.
As previously announced, the company will record the second and final after-tax charge of $86 million, which includes premium, issuing and tender costs related to extinguishment of European debt. In the light of current and expected future business conditions in the seismic sector, the company has undertaken and completed an impairment review of the WesternGeco multiclient library. As a result, WesternGeco will record a pre-tax charge of $398 million. Schlumberger will recognize an after-tax and minority interest charge of $205 million in the third quarter. Approximately 70% of the charge relates to North American surveys.
Schlumberger Smart Cards and Terminals Aims for New Heights as Axalto
Schlumberger Smart Cards and Terminals, a division of Schlumberger, announced that it has changed its name to Axalto to bring more visibility and reinforce the company image as a leading smart card player in a rapidly evolving market.
For the past 25 years, Axalto teams have led the way in shaping applications, developing solutions and delivering innovative technologies that have made smart cards a part of everyday life. The company is known for being first-to-market with cutting-edge products – from the first memory and microprocessor cards to the recent breakthroughs of the java-based microprocessor cards and smart cards that connect directly to the USB port of a personal computer to secure digital transactions and wireless networks.
“As Axalto, we will continue to lead through meeting the challenges of the international marketplace, developing and deploying high-quality products and solutions and making a visible difference to our customers’ businesses worldwide,” said Olivier Piou, President of Axalto. “Our teams, made up of 56 different nationalities, are committed to excellence – the driver of our performance.”
The division opted for a name that best reflects its smart card and point-of-sale terminals strategy and highlights the key contributions of smart cards in today’s digital age. Axalto combines the concept of secure, personalized access to information and transaction networks with altitude, that symbolizes the company’s strategic vision based on its acute understanding of the market and its evolution, as well as its long track record of being able to provide innovative products and solutions that are tailor-made to meet specific needs.
Axalto, formerly known as Schlumberger Smart Cards & Terminals, is the world’s leading provider of microprocessor cards (Gartner 2003, Frost & Sullivan 2003) — the key to digital networks — and a major supplier of point-of-sale terminals. Its 4500 employees serve customers in more than 100 countries, with worldwide sales exceeding 2.8 billion smart cards to date. The company has more than 20 years’ experience in smart card innovation and leads its industry in security technology and open systems.
Axalto continuously creates new generations of products for use in a variety of applications in the telecommunications, finance, retail, transport, entertainment, healthcare, personal identification, information technology and public sector markets. Smart card solutions provide convenience, security and privacy to public and private services operators, their customers and end users. For more information, visit us at [www.axalto.com]
S&P Upgrades Shares of Schlumberger to Accumulate
Standard & Poor’s equity analyst covering oil and gas equipment and services companies has upgraded the STARS ranking on Schlumberger (NYSE: SLB) from “Hold” (*** out of *****) to “Accumulate” (**** out of *****) at $51.00 per share. A leading provider of independent research, indices and ratings, Standard & Poor’s made this announcement through Standard & Poor’s MarketScope, its real-time market intelligence service.
“Schlumberger has signed an agreement to sell SchlumbergerSema, its IT business segment, for $1.5 billion,” says John Kartsonas, Oil and Gas Equipment and Services Analyst, Standard & Poor’s Equity Research Services.
“We believe the deal will benefit the company in two important fronts: Schlumberger’s balance sheet should get stronger, as we expect the company to use most of the proceeds to reduce debt. Second, we think the proposed sale will increase Schlumberger’s focus to its core oilfield business, which should help performance and profitability. We are raising our 12-month target price to $61, based on 12 times our 2004 EBITDA estimate, as we expect the shares to return to their historical premium valuation,” concludes Kartsonas.
Standard & Poor’s Stock Appreciation Ranking System (STARS), which was first introduced on December 31, 1986, reflects the opinions of Standard & Poor’s equity analysts on the price appreciation potential of 1,200 U.S. stocks for the next 12 month period. Rankings range from five-STARS (“Buy”) to one-STARS (“Sell”).
Standard & Poor’s analytic services are performed as entirely separate activities in order to preserve the independence of each analytic process. In this regard, STARS, which are published by Standard & Poor’s Equity Research Services, operates independently from, and has no access to information obtained by Standard & Poor’s Rating Services, which may in the course of its operations obtain access to confidential information.
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