NEW YORK (Reuters) - Schlumberger Ltd said it expected to win a greater share of shale gas drilling with its planned acquisition of rival oilfield services company Smith International .
Smith shares rose 6.1 percent to $39.99 in morning New York Stock Exchange trading the day after the deal was announced. SCHLUMBERGER (SLB.NY)fell 6.2 percent to $59.94.
In a conference call with Wall Street analysts on Monday, Schlumberger Chief Executive Officer Andrew Gould said he had been considering the deal "for some time," but the timing now was right, even though he acknowledged paying "a significant premium."
The deal had been valued at $11.34 billion, based on Friday's market close. But as of Monday morning, the value had declined to about $10.33 billion.
The deal, still subject to shareholder and regulatory approval, valued Smith stock at $45.84, a 37.5 percent premium over Thursday's closing price, according to a joint statement by the companies on Sunday. They expect the transaction to close later this year.
Schlumberger said on Sunday that it expected the acquisition to add to earnings per share in 2012. The company also expects to realize pretax savings after costs of about $160 million in 2011 and about $320 million in 2012.
"No doubt, in the long-term, shale gas is going to be one of the big new energy sources in the U.S. and overseas," Gould said, "and the capacity to serve that market in North America is of great interest to me."
Asked if he envisaged any regulatory or antitrust issues with the Smith acquisition, Gould said he did not believe they would cause any "change in the landscape."
Houston-based Schlumberger, which operates in about 80 countries, had previously said it wanted Smith's drillbit technology to offer its customers the option to drill deeper and cheaper for fossil fuels.
Smith CEO John Yearwood and Chief Financial Officer William Restrepo previously worked at Schlumberger for about two decades each. Yearwood was senior advisor to Schlumberger CEO Gould between 2006 and 2008.
(Reporting by Ernest Scheyder and Steve James; Editing by Lisa Von Ahn)
