Halliburton and Baker Hughes’ efforts to complete their US$34.6 billion mega merger hit a new snag with the Antitrust Division of the US Department of Justice (DOJ).
 |
|
Image from Baker Hughes. |
The two companies announced in a joint statement that the timing agreement with the DOJ will expire without reaching a settlement or the DOJ initiating litigation at this time to block their pending transaction.
“The DOJ has informed the companies that it does not believe that the remedies offered to date are sufficient to address the DOJ’s concerns, but acknowledged that they would assess further proposals and look forward to continued cooperation from the parties in their continuing investigation,” the two companies said.
The approval of the merger, which the two companies say is expected to help achieve substantial efficiencies enabling it to compete aggressively to provide efficient, innovative and low-cost services.
“Completion of the transaction would allow customers to operate more cost-effectively, which is increasingly important due to the current state of the energy industry and oil and gas prices,” the statement said.
Halliburton and Baker Hughes have worked over the past year with the DOJ, which include extensive and productive discussions with the DOJ about the merger, responses to several DOJ requests for information, producing millions of pages of documents, providing numerous written submissions in response to specific questions, and participating in multiple meetings with the DOJ.
“Halliburton proposed to the DOJ a substantial divestiture package that would facilitate the entry of new competition in markets in which products and services are being divested. Both companies strongly believe that the divestiture package, which recently was significantly enhanced to address the DOJ's specific competitive concerns, is more than sufficient to address concerns raised by competition authorities, including the DOJ,” the statement said.
Halliburton and Baker Hughes said discussions with the DOJ will continue, and will remain focused on completing the transaction as early as possible in 2016, but there is no guarantee that an agreement with the DOJ or other competition authorities will be reached.
“In that regard, Halliburton and Baker Hughes have also agreed to extend the time period for closing the transaction to no later than 30 April 2016, as permitted under the merger agreement, though the parties would proceed with closing prior to such date if all relevant competition approvals have been obtained,” the two companies said.
In March, the boards of directors of both Halliburton and Baker Hughes unanimously approved the merger agreement and the stockholders of each company overwhelmingly approved the transaction.
Halliburton and Baker Hughes continues to work with the European Commission, in addition to allother competition enforcement authorities.
The pending takeover has already received regulatory clearances in Canada, Colombia, Ecuador, Kazakhstan, South Africa, and Turkey.
Last month, Halliburton offered five tranches of senior notes worth $7.5 billion, to use cash to fund a portion of the pending merger with Baker Hughes.
In September, both companies announced they would divest several of their businesses for the approval of the merger.
Read more:
Halliburton raising billions for Baker Hughes merger
Halliburton, Baker Hughes to sell more businesses
Subscribe
