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Monday, May 2, 2016

Department of Justice Kills Halliburton Merger with Baker Hughes

From a Baker Hughes press release:
Halliburton Company(NYSE:HAL) and Baker Hughes Incorporated (NYSE:BHI) today announced that the companies have terminated the merger agreement they entered into in November 2014, effective April 30, 2016. 
This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20160501005039/en/ 
“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.” 
In connection with the termination of the merger agreement, Halliburtonwill pay Baker Hughes the termination fee of $3.5 billion by Wednesday, May 4, 2016. 
Halliburton will discuss the termination of the merger agreement during its previously scheduled conference call on Tuesday, May 3, 2016, at8:00 AM Central Time (9:00 AM Eastern Time). Please visit the websiteto listen to the call live via webcast. Interested parties may also participate in the call by dialing (888) 793-5581 within North America or (973) 935-8723 outside North America. A passcode is not required. Attendees should log in to the webcast or dial in approximately 15 minutes prior to the call’s start time.
From Rigzone:
Baker Hughes Inc said it planned to buy back $1.5 billion of shares and $1 billion of debt, using the breakup fee it will receive following the collapse of its proposed buyout by fellow oilfield services provider Halliburton Inc. 
The merger, valued at $35 billion when it was first announced in November 2014, would have created North America's largest oilfield services company to take on global market leader Schlumberger Ltd. 
Baker Hughes will get $3.5 billion as part of the merger agreement, which the companies terminated on Sunday after opposition from U.S. and European antitrust regulators. 
The U.S. Justice Department filed a lawsuit last month to stop the deal, arguing that it would leave only two dominant oilfield services companies. 
Baker Hughes, which is focusing on the development of products that lower costs and maximize production for oil and gas producers, also said on Monday it planned to refinance a $2.5 billion credit facility, which expires in September 2016.
View that whole article here. 

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