Aker Carbon Capture ASA () today announced an agreement with SLB to combine their respective carbon capture businesses to support accelerated industrial decarbonization at scale.
Bringing together complementary technology portfolios, leading process design expertise and an established project delivery platform, the partnership will leverage ACC’s commercial carbon capture product offering and SLB’s new technology developments and industrialization capability. It will create a vehicle for accelerating the introduction of early-stage technologies into the global market on a commercial, proven platform. Following the transaction, SLB will own 80% of the combined business and ACC will own 20%.
The International Energy Agency (IEA) sees carbon capture, utilization, and sequestration (CCUS) playing a critical role in the net-zero transition – estimating that over one gigaton of CO2 per year will need to be captured by 2030, scaling up to over six gigatons by 2050.
“The decision to combine ACC and SLB’s carbon capture business is underpinned by a strategic vision that reflects our commitment to accelerate the industrial adoption of carbon capture,” said Egil Fagerland, chief executive officer, ACC. “By partnering with SLB, we will become a diversified, global carbon capture player. Our combined suite of technologies and global reach will make a platform positioned to profitably scale faster, to the benefit of customers, employees and shareholders.”
The transaction is subject to regulatory approvals and is expected to close by end of the second quarter, 2024.
At closing, SLB will pay NOK 4.12 billion in cash to ACC for the purchase of 80% of the shares in Aker Carbon Capture Holding AS (ACCH), which holds the business of ACC. In addition, ACC will retain NOK 0.40 billion in cash. The sum of the purchase price for ACCH and retained cash corresponds to a value per ACC share of NOK 9.19. In addition, ACC will be entitled to a performance-based payment of up to NOK 1.36 billion.
The performance-based payments will be subject to the achievement of certain milestones, order intake and margin targets. The payments will be due when certain targets are met in the period 2025 to 2027, weighted towards the end of the period upon finalization of the financial statements for 2027. The performance-based payments will carry a market-based interest rate from the date of closing until the date of payment.
ACCH will pay $50 million to purchase SLB’s carbon capture business.
The cooperation between ACC and SLB as shareholders of the combined business, will be governed by a shareholders’ agreement. This will, inter alia, provide for board representation and certain other governance and minority protection rights for ACC, for SLB to finance the realization of the business plan by shareholder loans and for the possibility for ACC to sell its 20% stake in the combined business in the future.
After a lock-up period of three years, ACC will be entitled to sell its stake in ACCH to SLB during a period of six months (put option). The put option price will be based on the fair market value of the combined business with a floor equal to the purchase price agreed for ACCH as set out above (on a per share basis, and not including any performance-based payments) corresponding to approximately NOK 1.03 billion for the retained 20% stake, and a ceiling at 2.0x this price. Conversely, SLB will after expiry of the put option have a right to purchase ACC’s 20% stake in the combined business during the following six months (call option). The call option price will be based on the fair market value of the combined business with a higher floor than the put option floor and a ceiling at 2.5x. The shareholders’ agreement also has customary buy-out rights for both shareholders in the event of a change of control in the other shareholder.