Halliburton and Baker Hughes scrap $28 billion merger

May 2, 2016 –Source: Reuters   Oilfield services provider Halliburton Co (HAL.N) and smaller rival Baker Hughes Inc (BHI.N) announced the termination of their $28 billion merger deal on Sunday after opposition from U.S. and European antitrust regulators.

The tie-up would have brought together the world’s No. 2 and No. 3 oil services companies, raising concerns it would result in higher prices in the sector. It is the latest example of a large merger deal failing to make it to the finish line because of antitrust hurdles.

“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, chief executive of Halliburton.

The contract governing Halliburton’s cash-and-stock acquisition of Baker Hughes, which was valued at $34.6 billion when it was announced in November 2014, and is now worth about $28 billion, expired on Saturday without an agreement by the companies to extend it, Reuters reported earlier on Sunday, citing a person familiar with the matter.

Halliburton will pay Baker Hughes a $3.5 billion breakup fee by Wednesday as a result of the deal falling apart.

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Photo: Reuters/Andrew Cullen

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