Halliburton, Baker Hughes merger talks.

15. November, 2014 News No comments

Two of the biggest energy companies could soon become one. Shares of companies went up Halliburton +2,40% and Baker Hughes +1,94% after confirmation that the two oil companies are in talks to merge. A merger is an effort to save costs.
Both Halliburton and Baker Hughes are oilfield service companies, and this potential deal is to help both companies weather falling oil prices, as oil-services customers, exploration and production companies, are not spending as much due to falling oil prices. The two companies currently help oil companies by selling equipment, renting tools or supplying labor, so falling prices make oil production less profitable. Their businesses are threatened if their clients cut production or demand better prices from them. Let’s remind that for the past three months, oil prices have gone down by about 25% and now price of oil is the lowest in the last four years (today’s price $ 75.82/bbl)
In a statement on 13th November, Baker Hughes said it is in “preliminary discussions” with Halliburton about a “potential business combination.”
A merged company would be worth $67 billion and have about 140,000 employees. But it would still be only half the size of industry leader Schlumberger.
If the deal goes through, it would be one of the largest energy deals in recent years.

Sources: Bloomberg, The Wall Street Journal, fortune.com
Image source: aecom.com

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Agata Gruszczak

Editor in YoungPetro, fourth year student of Mining and Geology at the Faculty of Drilling, Oil and Gas at AGH University of Science and Technology, member of AGH UST Student Chapter. Interested in enhanced oil recovery and unconventional resources. Keen on Scandinavian culture, reading fantastic literature.

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