Houston-based Halliburton announced it will separately market for sale the company’s fixed cutter and roller cone drill bits, directional drilling and logging-while-drilling (LWD), measurement-while-drilling (MWD) businesses.
The announcement comes as Halliburton and Baker Hughes seek buyers for as much as US$10 billion in assets prior to their merger to avoid antitrust concerns. The asset-divestiture strategy includes the Baker Hughes cementing division and the companies’ combined completion-tools lines in addition to Halliburton’s drill bit, directional drilling and LWD/MWD business divisions. The divestitures are a step toward winning approval from the US Justice Department for the $34.6 billion merger. Combined, Halliburton and Baker Hughes, which are currently the second- and third-largest oilfield service companies, respectively, plan to leverage the combined entity to compete against industry-giant Schlumberger.
On 27 March, Halliburton announced that its stockholders approved a proposal to issue shares of Halliburton common stock while Baker Hughes announced that its stockholders adopted the merger agreement and thereby approved the proposed combination of the two companies. Nearly 99% of the shares voted at Halliburton’s special meeting voted in favor of the proposal to issue the shares, and more than 98% of the shares voted at Baker Hughes’ special meeting voted in favor of the transaction.
The combined company will operate in more than 80 countries and will continue to be based in Houston. Halliburton/Baker Hughes will operate as one company, including the businesses held for sale until they are sold. Halliburton expects to complete the sale of the businesses in the same timeframe as the closing of the pending Baker Hughes acquisition, which is expected to be late in the 2H 2015.
Halliburton employs about 75,000 employees in 80 countries. Baker Hughes employs 62,000 employees in 80 countries.
Image courtesy of Baker Hughes.