Halliburton and Baker Hughes have terminated their proposed US$34.6 billion merger, both companies announced late Sunday, 1 May 2016.
According to the terms of the merger proposal, Baker Hughes will receive $3.5 billion for the termination of the agreement.
The merger was proposed back in November 2014, and had been met with much resistance from both US and European regulators, and even the industry itself. For the last 18 months both companies planned to shed business lines in order to make the merger more palatable and win approval from US Antitrust authorities. In March, French major Total's CEO Patrick Pouyanne came out against the merger, saying, that it was "not good news for explorers and producers."
But, the writing was on the wall for the proposed merger. Last month (April), the US Department of Justice (DOJ) filed a lawsuit to block the merger, claiming that it threatened to eliminate competition, raise prices and reduce innovation in the oilfield services industry.
CEOs from both Halliburton and Baker Hughes expressed disappointment on Sunday evening that the merger was unable to push through.
“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 CEO, Halliburton.
Baker Hughes' Chairman and CEO Martin Craighead: “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 US and abroad."
Image courtesy of Halliburton.
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