EU Antitrust Regulators Delay Decision on Halliburton/Baker Hughes Merger. Again

Halliburton and Baker Hughes agreed to merge two years ago, but they still haven't managed to make the merger happen.
Halliburton and Baker Hughes agreed to merge two years ago, but they still haven't managed to make the merger happen.
Photo by Flazingo Photos

It seemed like a minor miracle, or, you know, a result of dropping oil prices, when Halliburton and Baker Hughes officials agreed to merge their two Houston-based companies back in 2014, but it's turning out that getting these longtime rivals — the second- and third-largest oil field service providers in the United States, respectively — to agree to become one company was the easy part. 

Between the scrutiny of U.S. Department of Justice officials, tanking oil prices that have made it increasingly difficult to sell off the assets the companies need to rid themselves of to mollify the concerns of antitrust regulators, and a looming self-imposed April deadline, the companies have plenty of hurdles to clear before they even get close to sealing the deal.

On top of all that, the European Union has to sign off on the merger as well, but EU antitrust regulators haven't exactly been in a rush to get their review of the merger completed. In fact, EU antitrust regulators  have just halted their investigation entirely, according to this report from Reuters.

This isn't the first time the EU's competition authority, the European Commission, has thrown a monkey wrench into the oil field services companies' efforts to combine. The commission has already rejected the $34.6 billion deal once, but the companies quickly reapplied. Then in January, when Halliburton and Baker Hughes declined to offer early concessions to the commission that might have made the idea of two large oil field services companies more palatable to the EU's antitrust arm, the commission responded by opening up a much more in-depth investigation into the merger.

(So far, it seems like every time the companies don't cough up the information the regulators want, the EU just happens to announce another delay in a final decision on the merger.)

Initially, the commission regulators were slated to make a decision on the deal by June 23. However, the commission has stopped its investigation once again because the regulators haven't gotten information they requested from the companies. The European Commission will set a new deadline once regulators get what they've asked for. 

"This is a standard procedure on merger investigations which is activated if the notifying parties do not provide an important piece of information that the Commission has requested from them," commission spokesman Ricardo Cardoso stated, according to Reuters. 

Halliburton spokeswoman Emily Mir makes the latest pause in the commission review sound even more mundane, saying that this is just how the commission operates. "The European Commission has requested additional information as part of its ongoing review process, and Halliburton and Baker Hughes intend to provide the additional information as expeditiously as possible," she stated via email. "The suspension of the formal review period is standard procedure where additional time is needed beyond the Commission’s deadline in order to respond fully to the Commission’s request."

Mir said that Halliburton will present its formal offer of remedies to address EU concerns "in the near future." 

We asked specifically about the looming April deadline for the merger, but Mir's reply was vague. "Halliburton remains focused on closing the transaction as early as possible in 2016," Mir said in the email. 

So now the strict timeline that the companies had laid out is looking increasingly flexible. At the same time, we noticed that while Halliburton was speaking for both companies at the beginning of the year, Mir's statements on Monday only covered the Halliburton angle of things.

(We've asked Baker Hughes spokeswoman Melanie Kania about the Baker Hughes side of things. We'll update when we hear back.*) 

Mir did try to put a positive spin on the latest delay, noting that the deal has been approved in Canada, Colombia, Ecuador, Kazakhstan, Russia, South Africa and Turkey. What she failed to mention is that it was decidedly not approved in Australia. She didn't go anywhere near the fact that the DOJ is taking its sweet time on making a decision either way. 

*Update 10:40 a.m.: Baker Hughes spokeswoman Kania got back to us this morning via email, apologizing for the delay. "I recommend that you contact Halliburton on this topic," she stated in the email.

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