Halliburton to buy Baker Hughes for about $35 billion

Mon Nov 17, 2014 2:45pm EST
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By Swetha Gopinath

(Reuters) - Halliburton Co said on Monday it will buy Baker Hughes Inc for about $35 billion in cash and stock, creating an oilfield services behemoth to take on market leader Schlumberger NV as customers curb spending on falling oil prices.

Halliburton expressed confidence that the tie up of the No. 2 and No. 3 players in the services industry would clear regulatory hurdles, saying it was prepared to shed assets to mollify antitrust concerns that could arise in Asia, Europe and the Americas.

The deal, the second biggest in the U.S. energy sector this year, could create a company with more revenue than Schlumberger. (link.reuters.com/kav43w)

With oil prices down by a third since June, demand for drilling services has slipped and stock prices across the energy sector have suffered. That has stoked chatter among executives and bankers about acquisition opportunities companies could take advantage of to weather the downturn.

Halliburton Chief Executive Dave Lesar said the combined entity would be more resilient and able to offer a wider suite of products globally.

"Stronger in any market condition is better," he told Reuters. "We are in a cyclical business.”

Halliburton said it was ready to divest businesses that generate revenue of $7.5 billion to satisfy regulators and would pay Baker Hughes $3.5 billion if the deal was not cleared.

"At the end of the day, we wouldn't have done this deal if we didn't believe it was achievable from a regulatory standpoint," Lesar said on a conference call.   Continued...

The company logo of Halliburton oilfield services corporate offices is seen in Houston, Texas April 6, 2012.    REUTERS/Richard Carson