Baker Hughes and Halliburton provide update on DOJ review; new FAQs available
Date Published: 7/10/2015
The following press release was issued by Baker Hughes and Halliburton on July 10. See below for new frequently asked questions (FAQs) related to this press release, which have been added to go/RedBlue.
Halliburton and Baker Hughes today announced that they have entered into a timing agreement with the Antitrust Division of the U.S. Department of Justice (DOJ) pursuant to which both companies have agreed to extend the period for the DOJ’s review of Halliburton’s previously announced acquisition of Baker Hughes to the later of November 25, 2015 or 90 days after both companies have certified substantial compliance with the DOJ’s second request. Both Halliburton and Baker Hughes expect to certify substantial compliance with the DOJ’s second requests, issued to each company, by mid-summer. Timing agreements are often entered into in connection with large, complex transactions, and provide the DOJ additional time to review responses to its second requests. In light of the timing agreement, Halliburton and Baker Hughes also have agreed to extend the time period for closing of the acquisition to no later than December 1, 2015.
Halliburton and Baker Hughes continue to be in discussions with the DOJ, the European Commission and other competition enforcement authorities with respect to the acquisition. As previously announced, Halliburton is currently marketing for sale its Fixed Cutter and Roller Cone Drill Bits, Directional Drilling and Logging-While-Drilling (LWD)/Measurement-While-Drilling (MWD) businesses. In addition, 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 transaction. There is no agreement to date with any competition enforcement authority as to the adequacy of Halliburton’s proposal or any alternative proposal. The parties will continue to work constructively with all competition enforcement authorities that have expressed an interest in the proposed transaction.
FAQs
Baker Hughes, Halliburton, and the U.S. Department of Justice (DOJ) have agreed to extend the time the DOJ has to review Halliburton’s pending acquisition of Baker Hughes. Baker Hughes and Halliburton also have agreed to extend the time period for closing the pending acquisition through Dec. 1, 2015.
Read press release
What does this press release mean?
Timing agreements are intended to provide the DOJ with additional time to review the companies’ responses to the DOJ’s second requests.
What does this mean for the deal?
• Timing agreements are not unusual and are often entered into in connection with large, complex transactions.
• The second requests are a standard part of the regulatory review process by the DOJ and were expected by Halliburton and Baker Hughes.
• Both companies’ goal continues to be to complete the transaction late in 2015.
What happens next?
• Halliburton and Baker Hughes expect to certify substantial compliance with the DOJ’s second requests by mid-summer.
• Halliburton and Baker Hughes will continue planning for the integration of the two companies across product lines, regions of operation, and functional support areas.
• Halliburton and Baker Hughes will provide updates on the regulatory process as appropriate.
• Halliburton and Baker Hughes remain competitors until the closing of the deal.
What does this mean for the previously announced divestiture plans?
• The previously announced plans to divest Halliburton’s Fixed Cutter and Roller Cone Drill Bits, Directional Drilling and Logging-While-Drilling (LWD)/Measurement-While-Drilling (MWD) businesses remain unchanged.
• Halliburton expects to complete the sale of the businesses in the same timeframe as the closing of the pending Baker Hughes acquisition.
• The sale of these businesses will not be completed until the terms and conditions with the relevant buyer have been agreed, approval has been obtained from the Halliburton’s Board of Directors, and final approval has been obtained of the Baker Hughes acquisition by competition authorities.
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 the Baker Hughes acquisition was announced.
What should we communicate to our customers and other stakeholders?
• Please refer them to Melanie Kania You can tell customers and other business partners that we are committed to providing information on the pending acquisition as appropriate.
• Baker Hughes and Halliburton remain competitors until the closing of the deal.