The Halliburton–Baker Hughes deal might not happen, despite Halliburton’s best efforts to shed assets to alleviate antitrust concerns, as the Justice Department is tilting towards blocking the deal, according to a New York Post report Monday.
Halliburton’s last offer might not be enough, as the DOJ could announce its decision to reject the deal Wednesday during the American Bar Association’s annual antitrust conference, according to sources cited by the Post.
Halliburton turned up 0.2% to 35.16 in the stock market today, as oil prices rose Monday morning. Baker Hughes shares sank 1.7% to 42.23 but were off their intraday lows.
Halliburton said it could sell up to $7.5 billion in assets to meet the DOJ’s concerns, and in January, Halliburton said in a release that it plans to offer a “substantial remedies package that it believes will address any substantive competition concerns.”
But as oil prices fall, companies are investing less in oil and gas, and only General Electric has remained willing to buy some of the assets, with Weatherford International dropping out, according to the Post’s source.
General Electric shares were down 1.3% Monday morning after the company received a ratings downgrade. Weatherford stock fell 0.7%.
If Halliburton can’t get the deal to close, it must pay a $3.5 billion breakup fee to Baker Hughes, so Baker Hughes could leave negations at the end of the month if the DOJ doesn’t reach a decision by then.
Regulators have been skeptical of the deal since the beginning, concerned that it would shrink the industry down to two major players: Schlumberger and Halliburton-Baker Hughes. Baker Hughes has been been trading at a significant discount to Halliburton’s offer price.
Schlumberger stock rose 0.6%.
The deal isn’t facing push-back in just the U.S. — European antitrust officials are to decide by July 11 on the merger, which has has already received regulatory clearance in Canada, Colombia, Ecuador, Kazakhstan, South Africa and Turkey, according to Halliburton.