SLB expands data center business with $4.1 billion deal for Kelvion

Updates shares, rewrites headline and paragraph 1 to show total deal value, adds details throughout

By Vallari Srivastava

Aug 31 (Reuters) - SLB SLB.N on Monday said it will acquire cooling equipment maker Kelvion from Apollo Global APO.N and funds managed by Triton for $4.1 billion, including debt, expanding its data center business amid an AI-driven boom in power and cooling infrastructure demand.

The world's largest oilfield services company will pay $3.4 billion in cash and assume about $700 million of Kelvion's debt. While asset manager Apollo is majority owner, funds advised by Triton hold a minority interest in the cooling equipment maker.

SLB shares were up 3.8% in morning trading.

The deal reflects a broader push by oilfield contractors to sell power equipment, turbines and data solutions as demand for drilling slows and an increasing number of rigs idle across North America.

Kelvion's acquisition will expand the range of equipment SLB can supply to customers and more than double its revenue opportunity per gigawatt of delivered capacity, the oil services company said.

In 2028, SLB expects its combined data center solutions business to generate revenue of $4.5 billion to $5 billion and adjusted earnings before interest, taxes, depreciation and amortization of $700 million to $800 million.

Kelvion increased its investments and strategic focus on serving data centers after it was acquired by Apollo in 2025, according to the asset manager, with the business now its largest and fastest-growing segment.

However, roughly $1.1 billion of Kelvion's revenue in fiscal year 2026 was from other avenues, including heat pumps, renewables, carbon capture and processing solutions, said Stifel analyst Stephen Gengaro.

SLB reaffirming plans to return more than $4 billion to shareholders this fiscal year, with total annual shareholder returns expected to at least match 2026, also signals the deal is not being funded by slowing repurchases, Gengaro added.

The transaction is expected to close in the first half of 2027.

(Reporting by Vallari Srivastava in Bengaluru; Editing by Jonathan Ananda)

((Srivastava.Vallari@thomsonreuters.com;))