The Halliburton and Baker Hughes US$34.6 billion proposed merger is getting an extension of about 90-days after the two oil giants entered into a timing agreement with the Antitrust Division of the US Department of Justice (DOJ) for its review.
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Image from Halliburton. |
The extension is expected no later than 25 November 2015 or 90 days after both companies have certified substantial compliance with the DOJ’s second request.
Both Halliburton and Baker Hughes expect to certify substantial compliance with the DOJ’s second requests, issued to each company, by mid-summer. Timing agreements are often entered into in connection with large, complex transactions, and provide the DOJ additional time to review responses to its second requests. In light of the timing agreement, Halliburton and Baker Hughes also have agreed to extend the time period for closing of the acquisition to no later than 1 December 2015, Baker Hughes said.
Halliburton and Baker Hughes continue to be in discussions regarding the deal with the DOJ, the European Commission and other competition enforcement authorities.
In March, both Halliburton and Baker Hughes stockholders showed an overwhelming response of nearly 99% and 98% respectively, in favor of the merger.
A merger agreement was reached in November 2014 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.
Halliburton is currently marketing for sale its Fixed Cutter and Roller Cone Drill Bits, Directional Drilling and Logging-While-Drilling (LWD)/Measurement-While-Drilling (MWD) businesses.
For Baker Hughes, the merger will give the company an enterprise value of about $38 billion.
Read more:
Stockholders approve Halliburton/Baker Hughes deal
Halliburton announces Baker integration plan
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