Halliburton Deal Deadline Suspended as EU Seeks More Data

  • EU antitrust regulator stops clock on review, requests info
  • Halliburton says it made presentation of divestment plan to EU

The European Union suspended the deadline for its review of Halliburton Co.’s acquisition of Baker Hughes Inc. after the oil-service providers presented a plan to sell assets to win over regulators.

Stopping the clock on a review “is a standard procedure” on merger investigations when companies don’t provide important information, EU spokesman Ricardo Cardoso said in an e-mailed reply to questions. The move could mean the EU delays its decision on the deal past the deadline of June 23.

Halliburton said the companies intend to provide the additional information “as expeditiously as possible,” spokeswoman Emily Mir said. The company will make a formal offer of remedies “in the near future” after it made a draft proposal to address the EU’s competition concerns, she said.

Halliburton agreed to buy Baker Hughes in November 2014 in a cash-and-stock deal that at the time was valued at about $35 billion. The transaction was scheduled to close last year, but has been delayed as the companies seek to resolve antitrust concerns in the U.S. and Europe.

“The companies continue to work constructively with the commission and other competition enforcement authorities that have expressed an interest in the proposed transaction,” Mir said. “Halliburton remains focused on closing the transaction as early as possible in 2016.”

The draft offer made by Halliburton and Baker Hughes may enable them to avoid getting a statement of objections listing the EU’s competition concerns if the commission considers the proposal acceptable, according to Louisa Penny, an antitrust lawyer at Taylor Wessing LLP in London.

“The problem for the parties is that once the statement of objections is issued, any remedies would necessarily be required to address all concerns that are identified,” Penny said. “By offering suitable remedies at this stage, the parties are able to avoid this.”

The EU review of the deal was held up four months last year after regulators rejected the companies’ initial filing as incomplete. The companies extended to April 30 the time period for closing their pending after failing to satisfy U.S. justice department concerns.

Halliburton has been adding assets to the list of businesses it plans to sell to gain antitrust approval. The company plans to divest Baker’s offshore drilling-and-completions fluids division and the bulk of Baker’s completion systems, people familiar with the matter said earlier this month.

The EU merger authority opened an in-depth probe into the deal on Jan. 12, citing concerns that combining the the second- and third-largest suppliers to oil exploration companies may impede competition and increase prices.

Before it's here, it's on the Bloomberg Terminal.