Business
E.U. halted its review of the Halliburton-Baker Hughes deal for lack of information.
Stopping the clock on a review “is a standard procedure” on merger investigations when companies don’t provide important information, EU spokesman Ricardo Cardoso said in an e-mailed reply to questions. The move could mean the EU delays its decision on the deal past the deadline of June 23. Halliburton said the companies intend to provide the additional information “as expeditiously as possible,” spokeswoman Emily Mir said. The company will make a formal offer of remedies “in the near future” after it made a draft proposal to address the EU’s competition concerns, she said. Halliburton agreed to buy Baker Hughes in November 2014 in a cash-and-stock deal that at the time was valued at about $35 billion. The transaction was scheduled to close last year, but has been delayed as the companies seek to resolve antitrust concerns in the U.S. and Europe. “The companies continue to work constructively with the commission and other competition enforcement authorities that have expressed an interest in the proposed transaction,” Mir said. “Halliburton remains focused on closing the transaction as early as possible in 2016.”
Reuters writes:
The EU competition authority will set a new deadline for its decision when it has the required information from the companies. The previous deadline was June 23. Halliburton is prepared to sell businesses with combined 2013 revenue of $5.2 billion to appease regulators worried about higher prices and less innovation following the merger. It has yet to make a formal offer to the Commission. U.S. antitrust regulators are also examining the bid which has received the green light in Canada, Colombia, Ecuador, Kazakhstan, South Africa and Turkey. The deal comes amid falling oil prices and reduced drilling activity as oil producers mothball rigs and scale back spending.
Market Exclusive notes:
Halliburton is said to be selling more businesses so that it stands a better chance of getting approval from the regulators. For that purpose, it also intended to sell its offshore drilling and fluids division apart from most of the completion systems. However, the company’s spokesperson refused to confirm or deny the reports. On January 12, the EU merger regulator launched an in-depth investigation into the Halliburton–Baker Hughes deal. The regulator was concerned that the integration between the third and the second biggest oil and gas service suppliers might hamper competition and increase prices.
