Daily GPI / M&A / Production / NGI The Weekly Gas Market Report / NGI All News Access

Halliburton, Baker to Sell More Assets, Possibly Delay Merger Until 2016

Halliburton Co. and Baker Hughes Inc. are putting up for sale more businesses as they march toward completing their tie-up, which may be extended into 2016, the operators said Monday.

The Houston-based oilfield services (OFS) giants agreed to a merger last November and began marketing some units to ensure antitrust review approval by the U.S. Department of Justice (DOJ) and other authorities (see Daily GPINov. 17, 2014July 13).

Halliburton, North America's top pressure pumper, said as of last Friday it has proposals from "multiple interested parties" for a package of assets that include its fixed cutter and roller cone drill bits, directional drilling and logging-while-drilling/measurement-while-drilling business units. On Monday it said it now is marketing its expandable liner hangers business, which is part of its Completion & Production Division.

Baker on Monday said it now plans to divest its core completions business, which includes packers, flow control tools, subsurface safety systems, intelligent well systems, permanent monitoring, sand control tools and sand control screens. Baker also plans to sell the sand control business in the Gulf of Mexico (GOM), including two pressure pumping vessels, and the offshore cementing businesses in the GOM, Australia, Brazil, Norway and the United Kingdom.

Combined 2013 revenue for all of the businesses being marketed was about $5.2 billion. Any sales are subject to negotiating acceptable terms, approval by the respective boards and final approval by antitrust authorities. The merger could face resistance because of the businesses concentrated between the merged OFS companies, now No. 2 and No. 3, and No. 1, Schlumberger Ltd.

Whether the proposed divestitures pass muster with all of the regulatory agencies involved  hasn't been determined, Halliburton noted. The pending acquisition has received unconditional regulatory clearances in Canada, Kazakhstan, South Africa and Turkey. Halliburton expects the sales to be completed in the same timeframe as closing the Baker acquisition.

The timing agreement with DOJ also has been amended to extend the earliest closing date by three weeks to Dec. 15 from the current date of Nov. 25, or 30 days following the date on which the companies have substantially certified compliance with DOJ requests. Timing agreements often are entered into in connection with large, complex transactions to provide the DOJ additional time to review responses.

In light of the timing agreement, the companies said they have agreed to extend the time period to close to Dec. 16, but the amended agreement "also provides that the closing can be extended into 2016, if necessary."

ISSN © 2577-9877 | ISSN © 1532-1231 | ISSN © 1532-1266

Recent Articles by Carolyn Davis

Comments powered by Disqus