Halliburton and Baker Hughes have agreed to extend the time period for closing of the acquisition pursuant to the Merger Agreement to no later than December 16. “But I don’t think they’re there yet”. Where there is overlap between the two companies, generally the smaller of the two businesses is being sold, Desai said Monday in a phone interview.
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Baker on Monday said it now plans to divest its core completions business, which includes packers, flow control tools, subsurface safety systems, intelligent well systems, permanent monitoring, sand control tools and sand control screens.
“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”, the companies explained.
Lat week Weatherford global (NYSE:WFT) canceled plans for a $1 billion stock and debt offering, and likely won’t have enough cash to buy the drill bit and drilling-services business Halliburton needs to offload. The sales announced to date amount to $5.2 billion in 2013 revenue, the benchmark year the companies are using for the threshold.
Halliburton and Baker Hughes said they were pushing back the target date for approval from the US Department of Justice’s antitrust division to December 15, 2015, three weeks later than the prior projection. Other leading oil services companies also fell on lower oil prices (Other OTC: UBGXF – news). Using fracking offshore to increase production is part of a broader industry-wide strategy to make billion-dollar deep-sea developments pay off.
Also targeted for divestment are Baker Hughes sand control business in the Gulf of Mexico, including two pressure pumping vehicles, and its offshore cementing businesses in Australia, Brazil, the Gulf of Mexico, Norway and the United Kingdom. Baker Hughes Chairman and Chief Executive Officer Martin Craighead said the merger would be “efficient”.
Halliburton likewise said it would also strip its expandable hangers business, while Baker Hughes will strip three businesses.
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The businesses’ offer is dependent upon the merger being endorsed by controllers. The additional businesses up for sale are the “necessary blocking/tackling” for getting the deal done, they wrote.
