Halliburton Co. plans to separately market for sale three drilling businesses as part of its plan to obtain regulatory approval to merge with Baker Hughes Inc.
The Fixed Cutter and Roller Cone Drill Bits business is being marketed, as well as the Directional Drilling unit. Also to be marketed is the Logging-While-Drilling/Measurement-While-Drilling unit.
"Thanks to employees' hard work, these businesses represent strong products and services in the oilfield services industry, and we believe the value inherent in these businesses will be recognized by prospective buyers," said Halliburton CEO Dave Lesar. "Although we would prefer to retain these assets, we will be required to divest some of our overlapping businesses to obtain competition authorities' approvals as anticipated when we announced the Halliburton-Baker Hughes transaction."
The companies' boards already have given the green light to the merger, which was announced last fall (see Shale Daily, March 27; Nov. 17, 2014). To ensure regulatory approval, Halliburton and Baker have said they could sell up to $10 billion in assets. Halliburton had a 28% share of the North American pressure pumping business at the end of 2014, while Baker held 26% and No. 1 provider Schlumberger Ltd. had 14%. For hydraulic fracturing techniques, Halliburton's market share was about 26%, with Baker at 13% and Schlumberger at about 20%. In the cementing/pumping business lines, Halliburton controlled 35% of the market, Baker 16% and Schlumberger had 27%.
The final sales aren't to be completed until "acceptable terms and conditions" are negotiated. Approval also would be required by Halliburton's board. The plans hinge on final approvals of the Baker acquisition by authorities.
Halliburton, based in Houston, would operate as one company until it sells some of the business unit. The Baker acquisition now is expected to be completed in the second half of the year.