First Proposal Denied due to “Insufficient Data”
Halliburton (ticker: HAL) remains adamant on closing its $35 billion merger with Baker Hughes (ticker: BHI) by year-end, and the two oilservice giants progressed on the antitrust side by resubmitting a regulatory filing to the European Commission (EU) on November 27, 2015. The previous proposal, submitted in July, was denied due to “insufficient data.”
The EU has until January 12, 2016 to reach a decision.
The highly publicized merger was first announced more than one year ago. Gaining antitrust approval has been a massive undertaking in itself, as respective government agencies scrutinize logistics of the world’s second and third-largest oilservice companies finalizing a combination. The United States and Australia are scheduled to announce their decisions on December 16 and 17, respectively. Other agencies in Canada, Kazakhstan, South America and Turkey have all given their stamp of approval.
The two companies were prepared to sell up to $10 billion in assets to satisfy any antitrust issues.
“Let me be very clear, we remain confident this deal will be approved,” said Dave Lesar, Chief Executive Officer of Halliburton, in the company’s Q3’15 conference call. “We continue to target a 2015 close, but the transaction could move into 2016, which is allowed under the merger agreement. We are enthusiastic about and fully committed to closing this compelling transaction and achieving our annual cost synergy target of nearly $2 billion.”
Baker Hughes is in line to receive a payout of $3.5 billion if the merger is not successful, according to the original terms of the deal.
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