Halliburton Buys Out Baker Hughes
Posted on: 17/11/2014

After it was leaked last week that oil services provider Halliburton planned to buy out Baker Hughes, we can now reveal that this deal has just become official after Baker Hughes accepted an offer of $35 billion.

Whilst it was feared that this deal could quickly become a hostile takeover, with Halliburton considering replacing the entire board of directors of Baker Hughes in 2015, and Baker Hughes originally unwilling to negotiate, the deal secured works in good favour for both sets of shareholders. However as an insurance policy Halliburton has been forced to include a clause in the deal which requires them to pay $3.5 billion to Baker Hughes if the transaction does not go through (due to antitrust issues), however the size of this sum stands as strong evidence that both companies are serious about the acquisition.

Halliburton has already offered comforting advice to Baker Hughes employees stating that “Halliburton alone is hiring 21,000 people this year. Both companies are growing, and this growth creates opportunities for talent. We will use this transition to provide opportunities to the talent within the organizations, and this combination will make the company a place where people are going to want to work”. This statement given by CEO Dave Lesar is encouraging for the current staff who may have been vulnerable to job losses following the acquistion.

The combination of the two oil companies will achieve them a market value of just over $80 billion, whilst this is a substantial lot less than boasted by rival Schlumberger who have an estimated market worth of $123 billion, Halliburton will achieve slightly larger revenues reducing the oil services industry from a four horse race down to just two.

Whilst Halliburton and Baker Hughes are the first oil companies responding to the crude oil price downfall by means of a megadeal, it is unlikely that they will be the last to do so.

To be kept up to date with news in the oil industry follow us on twitter @blueprintOnG

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