Energy
Is the Halliburton-Baker Hughes Merger Going to Happen?
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In November 2014, Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI) announced an agreement under which Halliburton would pay $35 billion for Baker Hughes, a premium of around 40% at the time. The deal was expected to close by the end of 2015, but it is still trapped in a regulatory embrace that may strangle it.
According to unnamed sources cited by the New York Post, Halliburton, which agreed to sell assets that generated around $7.5 billion in annual revenues, is “making a last-ditch bid” to save the deal. The Post also noted that regulators now want Halliburton to sell assets that generate about $10 billion in annual revenues.
Trouble is, buyers are scarce on the ground. General Electric Co. (NYSE: GE) was once said to be interested, but that was last September. Oilfield services competitor Weatherford International Inc. (NYSE: WFT) also was thought to be a potential buyer. So far, no sales have been announced.
Halliburton faces questions from regulators in the United States and in Europe, and so far neither is satisfied with the answers the company has provided. Several oil producers, including France’s Total S.A. (NYSE: TOT), have spoken out against the merger citing loss of competition. Chevron Corp.’s (NYSE: CVX) Brazilian subsidiary and Angola’s state-owned oil company Sonangol, which also has operations in Brazil, have filed comments with Brazilian regulators opposing the proposed merger.
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