The US Department of Justice (DOJ) and the European Commission are digging deeper into Halliburton’s US$34 billion proposed acquisition of Baker Hughes by requesting additional information in discrete areas.
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Image from Baker Hughes. |
Second requests were issued under the notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). Both Halliburton and Baker Hughes continue to work constructively with the DOJ on the investigation, both companies confirmed.
In addition, Halliburton confirmed that the company’s Form CO, the standard notification form required for merger approval by the European Commission, was filed on 23 July 2015. Halliburton then received a request from the Commission for additional information in a few discrete areas on 31 July. The information requested is deemed necessary by the Commission to complete the Form CO.
“Halliburton will work closely and cooperatively with the Commission to provide this additional information in the near future. This will then start the formal review process,” Halliburton said. “Halliburton is fully committed to a target of closing the acquisition in late 2015, though the acquisition agreement provides that the closing can be extended into 2016, if necessary.”
In mid-July, Baker Hughes previously certified substantial compliance with its second DOJ request. In February 2015, the two oil giants each received second requests from the DOJ in connection to the proposed merger.
On 10 July, the proposed merger received an extension of about 90-days, after entering a timing agreement with the DOJ Antitrust Division for review. At the time, Baker Hughes said both companies had agreed to extend the time period for closing the deal to no later than 1 December 2015.
Halliburton took a hit this quarter (2Q 2015) on the pending merger deal, enduring acquisition-related costs of $67 million, a 91% increase compared to $35 million in 1Q 2015.
Halliburton and Baker Hughes stockholders showed an overwhelming response of nearly 99% and 98% respectively, in favor of the merger in March 2015.
The merger agreement was reached in November 2014 that is estimated to be worth $34.6 billion in stock and cash. News of the merger leaked days prior to the announcement in mid-November, causing Baker Hughes’ stock to rise more than 15% to $59.48 from $50.98 per share. Halliburton’s stock went from $53.23 per share to $54.92 in two days following the news.
Halliburton is expecting the deal to create $2 billion a year in cost synergies and up to $7.5 billion in divestments.
Read more:
Halliburton, Baker Hughes merger gets DOJ extension
Stockholders approve Halliburton/Baker Hughes deal
Halliburton announces Baker integration plan
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