The Lubrizol Corporation announced last Monday that it has signed an agreement to acquire Weatherford Internationals oilfield chemicals business, known as Engineered Chemistry and its drilling fluids business, known as Integrity Industries. The addition of these two businesses provide Lubrizol with a more significant footprint in the $20 billion oilfield chemicals business and more importantly, extensive applications experience and end-user relationships.
Engineered Chemistry supplies additives and fluids for a range of oilfield activities, including cementing, drilling, flow assurance and fracturing. It offers chemistry expertise to solve problems throughout the oil and gas drilling process. The business consists of a core manufacturing and research organization which supports a global field distribution network. Engineered Chemistry was built through a series of acquisitions over the past 12 years and is headquartered in Houston, TX. It operates 10 sites located predominantly in North America.
Integrity Industries manufactures drilling fluid systems, including diesel, mineral oil and synthetic oil based fluids. The company supplies these drilling fluid systems to retail drilling fluid companies along with technical support. The business has occupied the same niche for more than 25 years and is recognized as an expert in oil based drilling systems and chemicals serving customers across a large North American footprint. Headquartered in Kingsville, TX, Integrity Industries operates approximately 14 locations.
This proposed acquisition provides us a new growth platform as we build out a multi-billion business in specialty chemicals and drilling fluids for the oilfield space, said James L. Hambrick, Lubrizol chairman, president and chief executive officer. With the addition of the companies technologies, combined with improved fluid formulation and applications knowledge, Lubrizol will be better positioned to innovate more quickly and become a solutions provider for both multinational oilfield service companies as well as more regional customers which have a significant share of the North American market.
Once the transaction is complete, Engineered Chemistry and Integrity Industries, along with Lubrizols legacy energy and water business and Berkshire Hathaway portfolio company, Lubrizol Specialty Products, Inc., will become a new business segment for Lubrizol. The new segment, Lubrizol Oilfield Solutions, will join Lubrizols other business segments, Lubrizol Additives and Lubrizol Advanced Materials. Within this new segment, Engineered Chemistry and Integrity Industries will operate independently.
The transaction is expected to close by the end of the year following receipt of all customary regulatory approvals.
