HalliburtonCo. and Baker HughesInc. could announce as early as May 2 plans to call off theirproposed merger, which would have combined the world's second- and third-largestoil field services firms, Bloomberg reported May 1, citing an unnamed source.Schlumberger Ltd. isthe world's largest oil field services company.
Halliburton's decision to push its earnings release back toMay 3 — and its citing of an April 30 merger deadline for doing so — hadobservers speculating that the company was preparing to throw in the towel.
The U.S. Department of Justice on April 6 filed an antitrustlawsuit seeking to stop Halliburton's proposed acquisition of Baker Hughes,saying it "threatens to eliminate competition, raise prices and reduceinnovation in the oilfield services industry." The European Commission hadalso expressed concerns that the deal may reduce competition.
Halliburton and Baker Hughes had until April 30 toobtain antitrustapproval from regulators or either side could walk away from the deal. BakerHughes could receive a $3.5 billion break-up fee as a result of a deal termination,and Halliburton is expected to state May 2 that it will meet that obligation,Reuters reportedMay 1.
The deal was struck in a very different environment for thetwo companies: Halliburton's stock price, currently at about $41, stood at$55.08 the last trading day before the deal was in November 2014 with avaluation of $34.6 billion.