The companies intend to demonstrate that the doj has underestimated the highly competitive nature of the oilfield services industry, the many benefits of the proposed combination, and the sufficiency of the proposed divestitures. Statement by commissioner vestager on announcement by halliburton and baker hughes to withdraw from proposed merger. In this case, based on the commissions indepth analysis, the transaction. But the tieup raises questions about whether the takeover will survive antitrust scrutiny, given the level of consolidation that it promises within the oil. Halliburton is scrubbing its plans for a mega merger with baker hughes.
To perform merger arbitrage, the investor will generally buy the stock of. Baker hughes company is an international industrial service company and one of the worlds. After general electric, weatherford international plc. Basics of the baker hughes and halliburton merger market. Doj files lawsuit against halliburton baker hughes merger by charles kennedy, the u. During its 80year history prior to its merger with baker hughes, baker oil. Oil prices are down, may go down further, or may go up a bit, although most analysis. For latest updates of cases follow this link updates of cases. Halliburton and baker hughes announce termination of. Bouchard that the investors claims have no basis in fact or law.
Halliburton and baker hughes believe that the proposed merger is good for the industry and customers. Halliburton first announced plans to acquire baker hughes in november 2014, however, the duo struggled to get the green light from antitrust regulators in multiple countries including the us and eu. To view pdf files on this website you need the free adobe reader. The baker hughes halliburton merger is now officially dead after the latter was unable to ease concerns of antitrust regulations in both the u. Halliburton and baker hughes announced their merger last year on november 17 and although they have some redundancies most analysts have determined that it will be a good fit. Halliburton, baker hughes consider merger bloomberg. Baker hughes completes general electric merger, forms bhge. Aside from the antitrust concerns centered on the merger, the doj also took action against valueact capital, a hedge fund associated. The department filed suit on april 6, 2016, to block the merger, alleging that the transaction would. The second and thirdlargest companies in the oil and gas industry said sunday theyre ditching the deal they first reached.
Your abstaining, failure to submit a proxy or vote in person at the special meeting, or failure to. The complaint described the competitive harm threatened by the merger, namely the loss of headtohead competition between halliburton and baker hughes in 23 different product markets, and explained the benefits that this competition brings in the form of lower prices, better products and services, and innovation. For jv and ecsc cases old cases not available via the search page follow this link. Ges motion to dismiss the consolidated proposed securities class action filed by baker hughes investors told chancellor andre g. Analysis of the baker hughes and halliburton transaction part 1 of 11 merger spread analysis. Halliburton and baker hughes are in trouble if their merger falls through the odds are increasing that a tieup wont happen.
Shares of baker hughes fell and halliburton rose monday as investors shrugged off news of the two firms merger breaking down. The end of halliburtons merger with baker hughes the. The revival of mergers and acquisitions in the oil and gas sector. Remedies in halliburton baker hughes in its complaint regarding the halliburton baker hughes transaction described in box 11 above, the us department of justice opined that the remedies proposed by the merging parties were insufficient to replicate pre merger. The halliburton baker hughes deal is the largest merger deal in the oil industry since 2010 when schlumberger slb bought drilling technology leader. Why halliburton baker hughes deal failed business insider. Dresser merge within the meaning of article 31a of the council. Considering nonprice effects in merger control background. Using the case study methodology, the study examines the recent announced merger of halliburton and baker hughes exploring the possible risks the merger itself may open up for the two firms. Blue tarpon, baker hughes, deepwater stimulation vessel, oilfield. Baker hughes, halliburton, schlumberger shares lead oil. Decisions, press releases and other communications from the commission are published as. Baker hughes and halliburton call off merger charts. Halliburton and baker hughes abandon merger after department of justice sued to block deal.
Then, arbitrageurs will exchange their bhi shares for 1. Halliburton and baker hughes, the worlds second and thirdlargest oilfield services companies, announced plans to merge in november 2014. Halliburton and baker hughes announce termination of merger agreement may 1, 2016 houston business wiremay 1, 2016 halliburton company nyse. Baker hughes stock suit has no basis in fact, ge says. Remedies in halliburton baker hughes in its complaint regarding the halliburton baker hughes transaction described in box 11 above, the us department of justice opined that the remedies proposed by the merging parties were insufficient to replicate pre merger competitive innovation pressures. Then, arbitrageurs will exchange their bhi shares for. Halliburton will discuss the termination of the merger agreement during its previously scheduled conference call on tuesday, may 3, 2016, at 8.
The proposed merger between halliburton and baker hughes would create a. Official site of the week magazine, offering commentary and analysis of the days breaking news and current events as well as arts. Schlumberger, bakerhughes and dresser, whereas halliburton is a weaker fourth. Oilfield services giants halliburton and baker hughes have nixed their merger following opposition from the obama administration.
Background of the baker hughes and halliburton merger. Halliburton and baker hughes intend to vigorously contest the dojs effort to block their pending merger. The proxy statement for the baker hughes and halliburton merger is a great read. Statement by commissioner vestager on announcement by. The halliburtonbaker hughes merger has been delayed again. In the last article of this series schlumbergercameron deal versus halliburton baker hughes merger part 1, we differentiated the two deals on the basis of their rationale and value derived.
Baker hughes, halliburton shares rise after merger breakdown. Halliburton company and baker hughes intend to vigorously contest the u. Bhi today announced that the companies have terminated the merger agreement they entered into in november 2014, effective april 30, 2016. Baker hughes confirmed the talks late thursday but warned that a. Arbitrageurs would buy baker hughes stock, short 1. Regarding their focus for 2015, halliburton s ceo dave lesar said.
Abstract this article provides an overview of economic analysis in. How the failed halliburtonbaker hughes deal reveals the problem. Other merger arbitrage resources other important merger spreads include the deal between hospira. The aim of the present study is to explore the risks and benefits of mergers compared to those of strategic alliances and test the classic agency theory in relation to firms and shareholders interest.
Halliburtonbaker hughes merger sinks on regulators. Halliburton equipment in the equipment yard thomson reuters halliburton and baker hughes tried to get together. In november 2014, the company entered talks with halliburton over a merger deal valued at. Halliburtonbaker hughes merger delayed until april. Halliburton and baker hughes merger becomes target for doj. Halliburton and baker hughes fired back, saying the merger was actually procompetitive, allowing the companies customers to benefit from a. The culture clash behind ges quick exit from baker hughes. Department of justice doj effort to block their pending merger. Post the merger between halliburton and baker hughes, weatherford is likely.
Hal plan to acquire baker hughes bhi faces further delay after european union antitrust regulators halt their investigation into the. Bhi today announced that the companies have terminated the merger. Halliburton calls off plans to acquire baker hughes. Schlumbergercameron deal versus halliburtonbaker hughes. Halliburton and baker hughes abandon anticompetitive merger. At the same time, halliburton and baker hughes are continuing to work constructively to resolve any remaining issues with the european commission and all other competition enforcement authorities that have expressed an interest in the proposed transaction. This time the two oil field services companies the second and third largest oil field service companies in the united states. The twoway the two oilfieldservices companies faced pressure from. The merger deal between general electrics oil and gas business. Halliburton and baker hughes provide update regarding doj.
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