Halliburton Cites Regulatory Approvals, Industry Challenges In Terminating Baker Hughes Merger
Halliburton Company (NYSE: HAL) and Baker Hughes Incorporated (NYSE: BHI) announced over the weekend that the companies have terminated their proposed merger agreement, which was proposed back in November 2014.
Halliburton proposed to acquire Baker Hughes in a transaction valued at $28 billion. However, regulatory and competitive concerns prompted antitrust officials to heavily scrutinize the deal.
Halliburton noted in its press release that as part of the merger agreement, it will pay Baker Hughes the agreed upon termination fee of $3.5 billion by Wednesday.
A conference call to discuss the termination of the merger is scheduled for Tuesday, May 3, at 8:00 a.m. ET.
"While both companies expected the proposed merger to result in compelling benefits to shareholders, customers and other stakeholders, challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action," said Dave Lesar, chairman and chief executive officer of Halliburton. "I sincerely thank both our employees as well as the Baker Hughes employees for their tireless efforts throughout the regulatory review process. While disappointing, Halliburton remains strong. We are the execution company – our strategy, technologies and service quality are focused on helping customers maximize production at the lowest cost and driving industry leading growth, margins and returns."
"Today's outcome is disappointing because of our strong belief in the vast potential of the business combination to deliver benefits for shareholders, customers and both companies' employees," said Martin Craighead, chairman and chief executive officer of Baker Hughes. "This was an extremely complex, global transaction and, ultimately, a solution could not be found to satisfy the antitrust concerns of regulators, both in the United States and abroad. As we turn the page on this chapter, I want to thank our customers for their patience and continued loyalty over the past 18 months. I also want to thank the entire Baker Hughes team for their unwavering dedication and commitment during this process. Baker Hughes is strongly positioned to build on its foundation and heritage as a technology innovator that differentiates for our customers and delivers compelling value to shareholders."
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