HOUSTON - SLB (NYSE: SLB), a global technology company, has announced an agreement to acquire an 80% stake in the carbon capture business of Aker Carbon Capture (ACC), a move aimed at accelerating industrial decarbonization. The transaction, valued at NOK 4.12 billion, will integrate SLB's carbon capture technology with ACC's commercial offerings to enhance the deployment of carbon capture solutions.
The combination of SLB's new technology developments and ACC's established commercial product offering is intended to create a platform that can introduce disruptive early-stage technology to the global market more efficiently. SLB may also make additional payments up to NOK 1.36 billion over the next three years based on business performance.
This strategic partnership comes at a time when the International Energy Agency (IEA) highlights the critical role of carbon capture, utilization, and sequestration (CCUS) in the net-zero transition. The IEA estimates that over one gigaton of CO2 per year needs to be captured by 2030, scaling up to over six gigatons by 2050.
Olivier Le Peuch, Chief Executive Officer of SLB, emphasized the importance of scaling up CCUS technologies and reducing capture costs, which represent a significant portion of the total spend on CCUS projects. The collaboration with ACC is expected to facilitate this by leveraging both companies' strengths in technology and process design.
The transaction is still subject to regulatory approvals and is anticipated to close by the end of the second quarter of 2024.
InvestingPro Insights
As SLB (NYSE: SLB) takes a bold step in the carbon capture space with its recent acquisition of a majority stake in Aker Carbon Capture, investors are keenly observing the company's financial health and market performance. SLB's market capitalization stands at a robust $78.65 billion, reflecting investor confidence in its strategic moves and overall business stability.
The company's commitment to innovation and sustainability is mirrored in its financial metrics, with a Price/Earnings (P/E) ratio of 18.39 for the last twelve months as of Q4 2023. This figure is complemented by a PEG ratio of 0.86, suggesting that SLB's stock is trading at a reasonable rate relative to its near-term earnings growth. Moreover, the company has shown a solid revenue growth of 17.96% over the same period, indicating a strong upward trajectory in its financial performance.
InvestingPro Tips reveal that SLB has maintained dividend payments for an impressive 54 consecutive years, a testament to its financial resilience and commitment to shareholder returns. Additionally, analysts predict the company will be profitable this year, which is supported by a profitable performance over the last twelve months. For investors looking for stability and long-term growth, these insights can be particularly reassuring.
For those interested in a deeper dive into SLB's financials and market predictions, InvestingPro offers additional insights and metrics. There are 9 more InvestingPro Tips available for SLB, which can be accessed through the InvestingPro platform. To enrich your investment strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
With SLB's next earnings date approaching on April 19, 2024, investors will be watching closely to see how its strategic initiatives, such as the ACC acquisition, will impact its financial outcomes and position in the carbon capture industry.
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