The $28 billion merger between Halliburton and Baker Hughes is officially over.
The companies announced Sunday that they terminated their merger agreement after it faced opposition from US and European antitrust regulators.
Reuters earlier reported that it would be called off as soon as Monday. The deal was valued at $35 billion when it was first announced in November 2014.
“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,” said Halliburton CEO Dave Lesar in astatement.
Halliburton will pay Baker Hughes a termination fee of $3.5 billion by Wednesday May 4.
“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,” said Martin Craighead, Baker Hughes CEO.
The contract governing Halliburton’s acquisition of Baker Hughes expired on Saturday without an agreement by the companies to extend it, Reuters reported.
In April, the Department of Justice moved to block the proposed merger, which also faced pressure from regulators in Europe.
Here’s the full statement:
Halliburton Company (NYSE:HAL) and Baker Hughes Incorporated (NYSE:BHI) today announced that the companies have terminated the merger agreement they entered into in November 2014, effective April 30, 2016.
“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,” said Dave Lesar, Chairman and Chief Executive Officer of Halliburton. “I sincerely thank both our employees as well as the Baker Hughes employees for their tireless efforts throughout the regulatory review process. While disappointing, Halliburton remains strong. We are the execution company – our strategy, technologies and service quality are focused on helping customers maximize production at the lowest cost and driving industry leading growth, margins and returns.”
“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,” said Martin Craighead, Chairman and Chief Executive Officer of Baker Hughes. “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. As we turn the page on this chapter, I want to thank our customers for their patience and continued loyalty over the past 18 months. I also want to thank the entire Baker Hughes team for their unwavering dedication and commitment during this process. Baker Hughes is strongly positioned to build on its foundation and heritage as a technology innovator that differentiates for our customers and delivers compelling value to shareholders.”
In connection with the termination of the merger agreement, Halliburton will pay Baker Hughes the termination fee of $3.5 billion by Wednesday, May 4, 2016.
Halliburton will discuss the termination of the merger agreement during its previously scheduled conference call on Tuesday, May 3, 2016, at 8:00 AM Central Time (9:00 AM Eastern Time). Please visit the website to listen to the call live via webcast. Interested parties may also participate in the call by dialing (888) 793-5581 within North America or (973) 935-8723 outside North America. A passcode is not required. Attendees should log in to the webcast or dial in approximately 15 minutes prior to the call’s start time.
As reported by Business Insider