Halliburton And Baker Hughes Terminate Merger Deal

(RTTNews) - Halliburton Co. (HAL) and Baker Hughes Inc. (BHI) announced Sunday that they terminated the merger agreement they entered into in November 2014, effective April 30, 2016.

In connection with the termination of the merger agreement, Halliburton will pay Baker Hughes the termination fee of $3.5 billion by Wednesday, May 4, 2016.

"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 Chief Executive Officer of Halliburton.

"Today's outcome is disappointing because of our strong belief in the vast potential of the business combination to deliver benefits for shareholders, customers and both companies' employees. 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 United States and abroad," said Martin Craighead, Chairman and Chief Executive Officer of Baker Hughes.

The U.S. Justice department filed suit on April 6, 2016, to block the merger, alleging that the transaction would unlawfully eliminate significant head-to-head competition between the companies in at least 23 markets crucial to the exploration and production of oil and natural gas in the United States.

"The companies' decision to abandon this transaction - which would have left many oilfield service markets in the hands of a duopoly - is a victory for the U.S. economy and for all Americans," said Attorney General Loretta E. Lynch.

In November 2014, Halliburton had agreed to acquire smaller peer Baker Hughes in a cash and stock deal valued at $78.62 per Baker Hughes share or a total of $34.6 billion. The deal represented an enterprise value of $38 billion.