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Oilservice major Halliburton announces marketing of certain assets to satisfy antitrust laws

Earlier this month, Halliburton (ticker: HAL) announced that it would divest $3.5 billion in assets in the first round of divestitures to satisfy antitrust concerns in its $35 billion acquisition of Baker Hughes (ticker: BHI). HAL will be separately marketing for sale the company’s Fixed Cutter and Roller Cone Drill Bits, Directional Drilling and Logging-While-Drilling (LWD)/Measurement-While-Drilling (MWD) business, according to a company press release.

During the company’s Q1’15 conference call, Chief Integration Officer and Executive Vice President Mark McCollum said the revenue associated with these businesses was approximately $3.5 billion. “We are very pleased with the strong interest that’s been expressed in these assets by potential buyers, both within the energy industry as well as outside the industry,” said McCollum. Final sale of the assets is subject to obtaining final approval of the BHI deal.

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When asked what other assets might be sold to meet antitrust laws, McCollum said it was too early to tell, but that more divestures would happen. “We know that there will be some additional divestitures to do, we don’t exactly know what those are going to be.” McCollum also said that the company is well under the $7.5 billion threshold laid out in the merger, making additional sales possible.

Australia Will Weigh In

The combined company will hold operations in more than 80 countries, meaning it has several different antitrust authorities to deal with in order to finalize the merger. Australia’s antitrust watchdog began its review of the acquisition last Tuesday, with the intention of issuing a decision or outlining any concerns about the deal by July 9, reports Reuters.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.