HOUSTON (KTRK) --Halliburton and Baker Hughes have called off a nearly $35 billion merger after the U.S. Justice Department filed a lawsuit to stop the acquisition.
The companies announced their plan to combine in November 2014, shortly after oil prices began to fall. The deal would have combined two of the world's three leading providers of oilfield services to oil and gas companies and create a bigger rival to the industry leader, Schlumberger. But because it failed, Halliburton must now pay Baker Hughes the termination fee of $3.5 billion by Wednesday.
We'll have more on the merger coming up on Eyewitness News at 10pm.
Both companies issued a statement, addressing the decision:
"While both companies expected the proposed merger to result in compelling benefits to shareholders, customers and other stakeholders, challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action," said Dave Lesar, Chairman and Chief Executive Officer of Halliburton. "I sincerely thank both our employees as well as the Baker Hughes employees for their tireless efforts throughout the regulatory review process. While disappointing, Halliburton remains strong. We are the execution company - our strategy, technologies and service quality are focused on helping customers maximize production at the lowest cost and driving industry leading growth, margins and returns."
"Today's outcome is disappointing because of our strong belief in the vast potential of the business combination to deliver benefits for shareholders, customers and both companies' employees," said Martin Craighead, Chairman and Chief Executive Officer of Baker Hughes. "This was an extremely complex, global transaction and, ultimately, a solution could not be found to satisfy the antitrust concerns of regulators, both in the United States and abroad. As we turn the page on this chapter, I want to thank our customers for their patience and continued loyalty over the past 18 months. I also want to thank the entire Baker Hughes team for their unwavering dedication and commitment during this process. Baker Hughes is strongly positioned to build on its foundation and heritage as a technology innovator that differentiates for our customers and delivers compelling value to shareholders."
Halliburton will discuss the termination during its previously scheduled conference call at 8am Tuesday. The call will be made available on a live webcast and also by dialing 888-793-5581 within North America or 973-935-8723 outside North America. A passcode is not required. Attendees should log in to the webcast or dial in approximately 15 minutes prior to the call's start time.
The Associated Press contributed to this report