The Market Vectors Oil Service ETF (NYSEArca: OIH) climbed almost 3.8% yesterday on volume that was more than 80% above average after Schlumberger (NYSE: SLB) said it will acquire rival Cameron International (NYSE: CAM) for $12.7 billion.
While there are still concerns that Halliburton (NYSE: HAL) will not be able to complete its acquisition of rival Baker Hughes (NYSE: BHI), Wednesday’s deal-making in the oil services space predictably touched-off speculation that more oil services firms are ripe takeover candidates.
Schlumberger is OIH’s largest holding at a weight of 23.6% while Cameron International is the ETF’s fourth-largest constituent with a weight of 5.8% as of Aug. 24. Halliburton and Baker Hughes are OIH’s second- and third-largest holdings, respectively, combining for 21% of the ETF’s weight. [Problems for Energy ETFs]
“The Merrill Lynch team said that the Cameron deal puts competitors like FMC Technologies, Inc. (NYSE: FTI), Aker Solutions, Forum Energy Technologies, Inc. (NYSE: FET) and Dril-Quip, Inc. (NYSE: DRQ) into focus. It also raises questions about what National Oilwell Varco (NYSE: NOV) and Weatherford International plc (NYSE: WFT) will do,” reports Jon C. Ogg for 24/7 Wall Street.
National Oilwell Varco and Weatherford International, a combined 9.1% of OIH’s weight, have long histories of being mentioned as takeover targets. FMC Technologies garners a weight of 3.9% in OIH.