Halliburton, Baker Hughes to divest more businesses
Halliburton and Baker Hughes will market for sale additional businesses in connection with Halliburton’s pending multibillion-dollar acquisition of Baker Hughes.
In a joint announcement issued on Monday, the companies said that several businesses were intended to be divested.
Those businesses are Halliburton’s expandable liner hangers business, which is part of the company’s Completion & Production Division; Baker Hughes’ core completions business, which includes: packers, flow control tools, subsurface safety systems, intelligent well systems, permanent monitoring, sand control tools and sand control screens; the Baker Hughes sand control business in the Gulf of Mexico, including two pressure pumping vessels; and Baker Hughes’ offshore cementing businesses in Australia, Brazil, the Gulf of Mexico, Norway, and the United Kingdom.
The divestitures process for the previously announced divestitures of Halliburton’s Fixed Cutter and Roller Cone Drill Bits, Directional Drilling and Logging-While-Drilling (LWD)/Measurement-While-Drilling (MWD) businesses is continuing, and Halliburton said that last Friday it had received proposals from multiple interested parties for each business.
As said in the announcement, the combined 2013 revenue associated with all of the businesses intended to be divested was approximately $5.2 billion. The sale of the businesses will be subject to the negotiation of acceptable terms and conditions for the divestitures, the approval of the divesting company’s Board of Directors, and final approval of the Baker Hughes acquisition by competition enforcement authorities. Halliburton expects that the companies will complete the sales of these businesses in the same timeframe as, and the closing of the divestitures would be conditioned on, the closing of the pending Baker Hughes acquisition.
“There is no agreement to date with any competition enforcement authority as to the adequacy of the proposed divestitures. The companies will continue to work constructively with all competition enforcement authorities that have expressed an interest in the proposed transaction. The pending acquisition has received unconditional regulatory clearances in Canada, Kazakhstan, South Africa, and Turkey,” it has been said in the announcement.
Closing date extended
Halliburton and Baker Hughes have also amended their timing agreement with the Antitrust Division of the U.S. Department of Justice (DOJ) to extend the earliest closing date by three weeks, to the later of December 15, 2015 (from the current date of November 25, 2015) or 30 days following the date on which both companies have certified final, substantial compliance with the DOJ second request.
The companies noted that the Merger Agreement also provides that the closing can be extended into 2016, if necessary.