Halliburton and Baker Hughes in merger talks
14 November 2014
US oilfield services providers Halliburton & Co and Baker Hughes Inc are in merger talks in a deal that will value the merged company at around $67 billion.
''Baker Hughes today confirmed that it has engaged in preliminary discussions with Halliburton Company regarding a potential business combination transaction. These discussions may or may not lead to any transaction,'' Baker Hughes said in a press release.
''Baker Hughes does not intend to comment further on market speculation or disclose any developments unless and until it otherwise deems further disclosure is appropriate or required,'' the release added.
Halliburton, which was looking to make acquisitions, is said to have approached Baker Hughes on a potential deal, according to several media reports.
Both are giants in the oilfield services providing services ranging from drilling wells, hydraulic fracturing / fracking, production and reservoir consulting, formation evaluation to pressure pumping.
Baker Hughes operates in over 90 countries and posted revenues of $22.3 billion last year, while Halliburton operates in 80 countries and clocked in revenues of $24.8 billion.
But a tie up between the No. 2 and No. 3 players will attract antitrust concerns not only in the US, but also in Europe, Brazil and China.
According to analysts both companies will have to divest assets in order to obtain regulatory approvals and closing of the deal will take a long time.
A successful deal would see Halliburton making its largest acquisition to date after its 1998 purchase of Dresser Industries for $8 billion, according to Bloomberg.
Halliburton has so far made acquisitions worth around $14 billion, but is far behind industry leader Schlumberger, which has spent $27 billion in takeovers.