Archer Limited and Baker Hughes Limited have signed official agreements for Archer to buy Baker Hughes' coil tubing and pumping (CT&P) business in the United Kingdom.
The definitive agreement follows a term sheet signed in January.
Baker Hughes is divesting the CT&P business as a part of a remedy package offered to the UK Competition and Markets Authority (“CMA”), in relation to its acquisition of Altus Intervention.
The CMA said in November that Baker Hughes' acquisition of Altus Intervention could reduce competition among UK oil and gas operators. The regulator said it was concerned that the loss of rivalry between the merging companies could lead to higher prices, reduced choice, and lower quality services for businesses in the UK that purchase coiled tubing and pumping services.
Announcing the definitive agreement on Wednesday, Archer Limited said the CT&P business included four complete CT&P packages with supporting equipment, specialized and optimized for the UK market.
As part of the transaction, Archer will take over a professional team of 51 employees in the UK, under a Transfer of Undertakings (Protection of Employment) (“TUPE”) process. Customer contracts related to the CT&P business will follow the transaction.
Closing of the transaction is still subject to the UK Competition and Markets Authority’s final approval and completion of the TUPE process.
Dag Skindlo, CEO of Archer: "We are excited to announce this agreement. The coil tubing and pumping business fits well within our overall strategy to grow our drilling and well services in the UK and to further grow our integrated P&A service offering. Archer has over time, developed and invested in both well P&A services and technologies, and we are proud to offer the broadest and the most advanced P&A service offering within the industry. We believe the acquisition will represent an attractive long-term investment with low risk and will be accretive to Archers’ key financial ratios.”