Halliburton and Baker Hughes to sell additional businesses prior to merger

Halliburton (NYSE: HAL) and Baker Hughes (NYSE: BHI) will market for sale additional businesses in connection with Halliburton’s pending acquisition of Baker Hughes.

Pursuant to the merger agreement, and in order to permit completion of Halliburton’s acquisition of Baker Hughes, the following additional businesses are intended to be divested: 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 UK.

The divestiture 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 has received proposals from multiple interested parties for each business.

The combined 2013 revenue associated with all of the businesses intended to be divested was approximately $5.2 billion. The sale of these 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 anticipates 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.

Halliburton and Baker Hughes have also amended their timing agreement with the Antitrust Division of the US Department of Justice (DOJ) to extend the earliest closing date by three weeks, to the later of Dec. 15 (from the current date of Nov. 25) or 30 days following the date on which both companies have certified final, substantial compliance with the DOJ second request. Timing agreements are often entered into in connection with large, complex transactions, and provide the DOJ additional time to review responses to its second requests. In light of the timing agreement, Halliburton and Baker Hughes have agreed to extend the time period for closing of the acquisition pursuant to the merger agreement to no later than Dec. 16. The merger agreement also provides that the closing can be extended into 2016, if necessary.


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