Halliburton to buy Baker Hughes for about $35 billion

Halliburton Co 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 SLB.N as falling oil prices threaten to erode demand.The merger is widely expected to raise anti-trust concerns and Baker Hughes shares, at $68.80 on Monday, were trading well short of the offer of $80.69 per share, based on Friday’s close.Halliburton said it was ready to pay $3.5 billion in termination fees if the transaction did not get antitrust approvals.Halliburton shares were down 6 percent at $51.80 premarket.The company said if required, it was ready to divest businesses worth $7.5 billion in revenue to get anti-trust approvals, although it believed regulators would ask for “significantly less”.There are at least seven major product lines where there is overlap between the two companies, who offer scores of services and technology, from drill bits, to cementing and casing work, to artificial lift systems that improve output from wells.”With $2 billion of synergies identified, we expect a key driver to the timing of this combination is the urgency to further reduce costs in order to be competitive if exploration and production companies push to retrench spending going forward,” Global Hunter Securities analysts wrote in a note.

via Halliburton to buy Baker Hughes for about $35 billion | Reuters.

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