Under the agreement, shareholders of Cameron will each receive 0.716 shares of Schlumberger common stock and $14.44 cash for each share.

The deal will combine the technology portfolios of the two firms into a ‘pore-to-pipeline’ products and services for the global oil and gas industry, Schlumberger said.

Schlumberger CEO and Paal Kibsgaard said: "We believe that the next industry technical breakthrough will be achieved through integration of Schlumberger’s reservoir and well technologies with Cameron’s leadership in surface, drilling, processing and flow control technologies.

"Deep reservoir knowledge further enabled by instrumentation, software and automation, will launch a new era of complete drilling and production system performance.

"In addition, we will achieve significant efficiency gains through lowering operating costs, streamlining supply chains, and improving manufacturing processes while leveraging the Schlumberger transformation platform."

Cameron shareholders will own approximately 10% of outstanding shares of common stock of Schlumberger, following completion of the deal.

Schlumberger expects savings of around $900m in the first two years after closing the deal.

Cameron CEO and chairman Jack Moore said: "Together, we will create a premier oilfield equipment and service company with an integrated and expanded platform to drive accelerated growth."

Subject to Cameron shareholders’ approval, regulatory approvals and other customary closing conditions, the transaction is planned to be completed in the first quarter of 2016.

Image: Cameron provides equipment for oil and gas industries. Photo: courtesy of num_skyman / FreeDigitalPhotos.net.