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Halliburton, Baker Hughes to Sell More Assets for Merger

Oilfield service providers Halliburton CompanyHAL and Baker HughesBHI announced plans to sell additional businesses to comply with the terms of their earlier-announced merger agreement. Shares of Halliburton and Baker Hughes fell about 5% and 4%, respectively, following the news.

The sale follows the U.S. Department of Justice's (DOJ) order that the companies have to sell some of their overlapping business units as a prerequisite for the $36 billion mega-merger deal.

The companies announced that the businesses available for sale would include Halliburton's expandable liner hangers business, which is part of its Completion & Production Division. Baker Hughes would sell its core completions business, sand control business in the Gulf of Mexico and offshore cementing businesses in Australia, Brazil, the Gulf of Mexico, Norway and the United Kingdom.

Halliburton had previously announced plans to sell three of its business units . The company confirmed that it has received proposals from several interested parties for each of these units. The names of the bidders have, however, have not been disclosed. Per earlier speculations , many companies, including some of the biggest names from the manufacturing space like General Electric Co. GE and Caterpillar Inc. CAT , had shown interest.

These divestments are, however, subject to consent from the Board of Directors of each company and approval for the Halliburton-Baker Hughes merger. Notably, the deal has already received unconditional regulatory clearances in Canada, Kazakhstan, South Africa, and Turkey.

The parties revealed that revenues from the businesses that have been put for sale totaled about $5.2 billion in 2013.

Also, Halliburton and Baker Hughes announced that they have extended the DOJ's review period by three weeks to Dec 15, 2015.

Currently, Halliburton carries a Zacks Rank #5 (Strong Sell) while Baker Hughes has a Zacks Rank #3 (Hold).

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BAKER-HUGHES (BHI): Free Stock Analysis Report

CATERPILLAR INC (CAT): Free Stock Analysis Report

HALLIBURTON CO (HAL): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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