Halliburton abandons $35 billion merger with Baker Hughes. The Texas oil giant has chosen to back off after the European Commission judged the deal too dangerous, because it could have hindered effective competition in violation of the merger regulation.
In particular, the marriage between the second and third world giant in the sector could have eliminated the third leader, Schlumberger. Also according to the US antitrust service the acquisition would have undermined competition in the petroleum services sector, leading to higher prices and a decline in innovation in the petroleum services sector.
"The difficulties in obtaining the remaining green light from the regulators and the general conditions of the sector, which have compromised the economic conditions of the agreement, have led us to the conclusion that the best choice is to abandon the project", explained the President and CEO of Halliburton, Dave Lesar.
“Oil and gas exploration and production are key sectors for ensuring competitive energy prices for consumers and businesses in the EU, as well as being particularly important for the efficient use of gas resources,” commented the Antitrust commissioner Margrethe Vestager, recalling how the EU bases its assessments "on the basis of the facts and on the merits".
In the case of the Halliburton-Baker Hughes merger, "the Commission has raised concerns for a large number of markets related to services for oil and gas exploration and production," he added, underlining that the European investigation was conducted in "close cooperation" with the antitrust authorities of the USA, Brazil and Australia.
The merger agreement was announced two years ago: Halliburton (world number 2 in oil services) would acquire Baker Hughes (world number 3) for 34,6 billion dollars, partly paid for with treasury shares which, however, subsequently depreciated on the stock exchange. Baker Hughes was worth $28,6 billion on Friday night. Halliburton will have to pay BH a cancellation fee of 3,5 billion.
The negotiations with the antitrust authorities lasted a long time and the commitments to sell assets did not help to convince both sides of the Atlantic and the Pacific.
