Tags: Energy | Halliburton | Talks | Baker Hughes

Blockbuster Energy Deal: Halliburton Reported in Talks to Buy Baker Hughes

Thursday, 13 Nov 2014 05:12 PM

Oilfield services provider Halliburton Co. is in talks to buy rival Baker Hughes Inc., a person familiar with the matter said on Thursday, but any potential deal could run into antitrust concerns.

Officials at Baker Hughes and Halliburton, both based in Houston, declined to comment on the talks, which were first reported by Dow Jones and in The Wall Street Journal. The person familiar with the matter spoke to Reuters on condition of anonymity.

Oil prices have slid by a third since June, eroding demand for drilling services and pummeling stock prices. Producers have pressured the services companies to slash prices, and a tie up between the No. 2 and No. 3 players in the industry might allow them to better weather the downturn.

A potential merger would create a drilling, logistics and well services giant worth $67 billion. Halliburton has reported having 80,000 employees and Baker Hughes 61,000.

If a deal were struck, the companies could well have to sell assets to convince regulators they would not hurt competition, said Seth Bloom, a veteran of the U.S. Department of Justice's antitrust division now in private practice.

"The question with mergers like this is are there divestitures of submarkets that can solve the problem," Bloom said. "It's clearly not a slam dunk to approval but it's not automatic that you can't get it through. You have to drill down to see what the markets are like."

An analyst who follows the company and did not want to be quoted said Halliburton could get the deal down with a mix of debt and equity and still maintain its investment rating.

He counted at least seven major product lines where there is overlap between the two companies and said the deal is also likely to draw the scrutiny of European Union regulators.

The merged entity would be only half the size of industry leader Schlumberger, which has a market capitalization of $125 billion.

The last major deal in the energy industry, announced in August and worth some $70 billion, was pipeline giant Kinder Morgan Inc.'s move to fold its various units into a single entity.

Baker Hughes shares surged 15 percent on the Dow Jones report to close at $58.75 on the New York Stock Exchange; the shares were up an additional 3.3 percent at $60.71 shortly after 5 p.m. in New York. Halliburton shares closed up 1 percent at $53.79 and were up less than a percent in aftermarket trading.

© 2017 Thomson/Reuters. All rights reserved.

   
1Like our page
2Share
Companies
Oilfield services provider Halliburton Co. is in talks to buy rival Baker Hughes Inc., a person familiar with the matter told Reuters Thursday, but any potential deal could run into antitrust concerns.
Energy, Halliburton, Talks, Baker Hughes
409
2014-12-13
Thursday, 13 Nov 2014 05:12 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved