Nathan Bomey, USA TODAY
Oilfield services giants Halliburton and Baker Hughes have nixed their merger following opposition from the Obama administration. The Houston-based energy companies last month pledged to "vigorously contest" the U.S. Justice Department's lawsuit against Halliburton's acquisition of Baker Hughes, but the obstacles appeared too significant to surmount. The demise of a deal previously valued at $34 billion was generally anticipated on Wall Street, where investors had expected government opposition to the tie-up of two of the three largest U.S. oilfield services companies.
Halliburton will pay Baker Hughes a $3.5 billion breakup fee to compensate for the deal's collapse.
"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," Halliburton CEO Dave Lesar said in a statement. Though the companies had pledged to sell assets to assuage monopoly concerns, U.S. antitrust division chief Bill Baer delivered a blistering rebuke of the deal, telling reporters in April that the deal posed a "serious" threat to competition and "wasn't fixable."....To Read More
My Take - Another good reason to eliminate all these anti-trust laws.
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