Aker Carbon Capture enters into billion dollar agreement with SLB

On the eve of Maundy Thursday, Aker Carbon Capture (ACC) and SLB (formerly Schlumberger) announce that the companies will merge their respective carbon capture operations and form a joint venture company.

– The decision to combine ACC’s and SLB’s carbon capture operations is underlined by a strategic vision that reflects our commitment to accelerate the implementation of carbon capture in the industry, says Managing Director Egil Fagerland in ACC, and continues:

– By entering into a partnership with SLB, we become a diversified and global player in carbon capture. Our combined technologies and global reach will create a platform that can scale profitably faster, to the benefit of customers, employees and shareholders.

The agreement means that SLB will pay NOK 4.12 billion to ACC for 80 percent of the shares in Aker Carbon Capture Holding (ACCH), where the operation is located. In addition, ACC will retain NOK 400 million in cash.

The purchase price for ACCH and the cash retained in ACC corresponds to a value per share for ACC of NOK 9.19, according to the stock exchange announcement.

In addition, it is stated that ACC is entitled to a performance-based payment of up to NOK 1.36 billion.

In comparison, the Aker Carbon Capture share was traded for NOK 5.8 on Oslo Børs on Wednesday.

INCLUDES PARTNERSHIP: CEO Egil Fagerland in Aker Carbon Capture. Photo: Are Haram

Can sell the rest of the company

The performance-based payment will depend on certain milestones, order intake and margin targets.

Furthermore, it is stated that ACCH will pay 50 million dollars for SLB’s carbon capture activities.

After a lockup period of three years, ACC can sell its entire share in ACCH to SLB through a put option.

The merger is expected to be completed by the end of the second quarter of 2024.

The news comes barely two weeks after ACC lost a contract for one of the company’s key projects at Teeside in the UK.

The carbon capture part of the project was given to a collaboration consisting of Technip Energies, GE Vernova, and Balfour Beatty, with Shell as supplier of the carbon capture part.

“Firstly, they lose a large project, and secondly, investors will probably ask questions about how competitive the technology is,” said analyst Vetle Wilhelmsen in SpareBank 1 Markets.

The share fell 14 percent on the stock exchange after the news became known.