Halliburton, Baker Hughes Officially Call Off Multibillion-Dollar Merger

Keep Houston Press Free
I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Houston and help keep the future of Houston Press free.

Late Sunday, after months of reassuring everyone (in public at least) that their proposed merger was still on,  Halliburton and Baker Hughes, the second- and third-largest oil field service companies in the United States, officially called off their $34.6 billion agreement to combine companies.

The announcement from the two Houston-based companies comes after the deadline to close the merger came and went on Saturday, April 30, without a closed deal. When the agreement was first announced in November 2014, it was generally expected that the merger would close in late spring 2015. However, antitrust regulators with the U.S. Department of Justice needed to review the agreement and sign off on it before the companies could formally become one large oil field services business.

(They also needed antitrust regulators from the European Union and various other countries to approve the merger, and the bids to make that happen were met with only some success. The EU rejected the merger once and has been reviewing the deal in a more in-depth process for months.) 

After months of silence, the DOJ in early April filed a lawsuit seeking to block Halliburton's attempt to buy Baker Hughes, its longtime rival, alleging that the transaction threatened to eliminate competition, raise prices and reduce innovation in the oilfield services industry. After that, the merger pretty much looked dead in the water. Sunday's announcement simply made it official, with each company issuing a copy of the same press release announcing that they're calling off the deal.

“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,” Dave Lesar, Halliburton chairman and chief executive officer, stated in the release. “While disappointing, Halliburton remains strong.”

“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,” Martin Craighead, Baker Hughes chairman and chief executive officer, stated, echoing Lesar in the release. “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."

Now that the deal is officially off, Halliburton is on the hook for a $3.5 billion "breakup" fee, which the company will pay out by Wednesday, according to the companies' release. 

Keep the Houston Press Free... Since we started the Houston Press, it has been defined as the free, independent voice of Houston, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Houston with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.


Join the Press community and help support independent local journalism in Houston.


Join the Press community and help support independent local journalism in Houston.