The collapse of Halliburton’s acquisition. Baker Hughes stays independent.

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The financial earthquake has appeared on the international stock markets. One of the biggest fusions in oil industry in recent years has been canceled. American multinational corporations and oil field services providers Halliburton and Baker Hughes have abandoned their 28$ billion worth merger.

“Challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action,” said Dave Lesar, chief executive of Halliburton.

The U.S Justice Department has been getting dozens of alarming signals from antitrust regulators (agencies), oil companies and the European Commission for a long time . Basing on above information and evidence the U.S Justice  Department prepared a lawsuit last month to stop the merger, arguing it would leave only two dominate suppliers in business (it would create specific kind of a duopoly).

“The companies’ decision to abandon this transaction – which would have left many oilfield service markets in the hands of a duopoly – is a victory for the U.S. economy and for all Americans,” said U.S. Attorney General Loretta Lynch (May, 1 2016).

As a result of the deal’s failure, currently Halliburton is obliged to pay a 3.5$ billion breakup fee. This expense will affect on the employment market. Halliburton plans to cut more than 600 jobs to acquire funds for liabilities.

Read more:

http://www.bloomberg.com/news/articles/2016-05-02/halliburton-baker-hughes-abandon-28-billion-merger-agreement

http://www.reuters.com/article/us-bakerhughes-m-a-halliburton-idUSKCN0XS1KW

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http://www.bidnessetc.com/

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