EU opens probe into Halliburton, Baker Hughes merger
(BRUSSELS) - EU antitrust regulators opened a probe on Tuesday into the proposed acquisition of oilfield service supplier Baker Hughes by rival Halliburton on fears that the deal could hike up energy prices in Europe.
The investigation by the European Commission, the EU's executive arm, follows regulatory difficulties in the US, where competition authorities rejected the latest divestment remedies set forward by the companies, delaying the deal.
Halliburton and Baker Hughes, both Texas-based, provide well services and drilling products to large oil companies like ExxonMobil and Total.
They announced their $34.6 billion merger agreement in November 2014, with Halliburton, number two in the oil-services industry, buying number-three Baker Hughes to take on market leader Schlumberger.
"The European Commission has opened an in-depth investigation to assess whether the proposed acquisition of oilfield service supplier Baker Hughes by rival Halliburton would impede effective competition in breach of the EU Merger Regulation," the European Commission said in a statement.
The opening of an in-depth inquiry does not prejudge the final result of the investigation and the commission now has until May 26 to take a final decision.
Faced with the regulatory challenges, the two companies last month set April 30, 2016, as a new deadline for completing the deal.
A December 15 deadline to finish the merger was missed, but with the US Department of Justice still open to "further proposals" to divest assets from the companies.
The companies were prepared to sell businesses to win regulatory approval for their merger, including assets in Halliburton's well completion and production business, two Baker Hughes pressure pumping vessels in the Gulf of Mexico and its offshore cementing business in Australia, Brazil, the Gulf of Mexico, Norway and Britain.
The combination "is good for the industry and customers," the companies said in December.
In midday trade on Wall Street, shares in Baker Hughes sank 2.41 percent at $40.51, while Halliburton fell 1.8 percent to $30.99.