Halliburton Baker Hughes Merger: Dave Lesar on DOJ Timing Expiry and Extension of Closing Transaction Date
1. What does this press release mean?
• Halliburton Company and Baker Hughes today announced that we expect that our timing agreement with the Antitrust Division of the U.S. Department of Justice (DOJ) will expire without reaching a settlement or the DOJ initiating litigation at this time to block their pending transaction.
Halliburton and Baker Hughes have also agreed to extend the time period for closing the transaction to no later than April 30, 2016, as permitted under the merger agreement, though the parties would proceed with closing prior to such date if all relevant competition approvals have been obtained.
2. Does this mean the deal is in jeopardy?
• The DOJ cannot unilaterally stop a merger. It must make its case in the federal courts.
• The companies believe that the proposed merger is good for the industry and customers.
• The merger is expected to create a strong company and achieve substantial efficiencies enabling it to compete aggressively to provide efficient, innovative and low-cost services.
• The companies remain focused on completing the transaction as early as possible in 2016.
3. What happens next?
• The DOJ has informed the companies that it does not believe that the remedies offered to date are sufficient to address the DOJ’s concerns, but acknowledged that they would assess further proposals and look forward to continued cooperation from the parties in their continuing investigation.
• Halliburton and Baker Hughes are continuing to work constructively to resolve any remaining issues with the European Commission and all other competition enforcement authorities that have expressed an interest in the proposed transaction.
• The companies intend to continue their discussions with the DOJ, and remain focused on completing the transaction as early as possible in 2016, but there is no guarantee that an agreement with the DOJ or other competition authorities will be reached.
• Halliburton and Baker Hughes will provide updates on the regulatory process as appropriate.
4. Does the DOJ’s action have an impact on other regulators?
• The merger between Halliburton and Baker Hughes is global in scope, requiring clearance from numerous regulators around the world.
• A number of those jurisdictions have already cleared this merger such as Canada, Colombia, Ecuador, Kazakhstan, South Africa, and Turkey; others are still conducting their reviews.
• We expect these regulators will keep a close eye on the United States proceedings, but each foreign regulator may exercise its independent judgment under their own legal regimes.
5. Will additional divestitures be announced?
• Halliburton has shared with various competition enforcement authorities around the world a proposal to divest additional businesses of the companies which, together with the previously announced divestitures, are within the scope of those contemplated by Halliburton at the time of the announcement of the transaction.
• Halliburton expected to be required to divest certain of the companies’ overlapping businesses to obtain competition authorities’ approvals when we announced the Baker Hughes acquisition.
6. What should we communicate to our customers and other stakeholders?
• You can tell customers and other business partners that we are committed to providing information on the pending acquisition as appropriate.
• Halliburton remains absolutely focused on service delivery and we will continue to deliver outstanding solutions and services to our customers.
• We are confident that the combined company will be a stronger and more diverse organization with the resources to better serve our valued customers well into the future.
