Halliburton today announced it had agreed to acquire Baker Hughes for approximately $35 billion in cash and stock. Via Reuters, the combined company would be a dominant player in onshore services such as fracking and horizontal drilling.
While there is much overlap between the firms’ services, a buyout would fill gaps in Halliburton’s portfolio for product chemicals and well pumps. Halliburton and Baker Hughes generated more pro forma revenue in 2013 than market leader Schlumberger, but the latter’s market capitalization is twice as large.
Halliburton will pay Baker Hughes $3.5 billion if the deal fails to clear the necessary regulatory hurdles. Halliburton also agreed to divest businesses that generate up to $7.5 billion if required by regulators, but the firm believes that amount will be significantly less.
Upon completion of the transaction, Halliburton’s board of directors will expand to 15 members, three of whom will come from Baker Hughes.
