Texas-based Halliburton and Baker Hughes both provide well services
New York - AFP
Oil-services companies Halliburton and Baker Hughes pushed back the time frame Tuesday for completing their proposed merger after US antitrust officials rejected their latest divestment remedies.
The two companies, seeking to combine to take on market leader Schlumberger, set April 30, 2016, as the deadline for completing the deal. In September, the companies had pushed back the time frame by three weeks to December 15.
Tuesday's deadline was expected to pass with the Department of Justice neither accepting offers by the companies to divest assets to win approval, nor choosing to sue to block the transaction, Halliburton and Baker Hughes said.
"The DOJ has informed the companies that it does not believe that the remedies offered to date are sufficient to address the DOJ's concerns, but acknowledged that they would assess further proposals and look forward to continued cooperation from the parties in their continuing investigation," the companies said in a joint statement.
Texas-based Halliburton and Baker Hughes both provide well services and drilling products to large oil companies like ExxonMobil and Total. They announced their $34.6 billion merger agreement in November 2014, with Halliburton, number two in the oil-services industry, buying number-three Baker Hughes.
The companies were prepared to sell businesses to win regulatory approval for their merger, including assets in Halliburton's well completion and production business, two Baker Hughes pressure pumping vessels in the Gulf of Mexico and its offshore cementing business in Australia, Brazil, the Gulf of Mexico, Norway and Britain.
The combination "is good for the industry and customers," the companies said. "The merger is expected to create a strong company and achieve substantial efficiencies enabling it to compete aggressively to provide efficient, innovative and low-cost services."
Baker Hughes shed 0.6 percent at $46.50, while Halliburton rose 1.5 percent to $37.10.
The move by antitrust regulators is the latest sign of the Obama administration's toughening stance on mergers after the Justice Department spiked high-profile deals, including Comcast's proposed purchase of Time Warner Cable and a bid by Sweden's Electrolux to buy General Electric's appliance division.
On December 7, antitrust officials at the Federal Trade Commission announced they opposed a proposed $6.3 billion merger between office-supply giants Staples and Office Depot.