Halliburton Co and Baker Hughes Inc both of Houston, TX have announced a definitive agreement under which Halliburton will acquire all of the outstanding shares of Baker Hughes in a stock and cash transaction. Under the terms of the agreement, Baker Hughes stockholders will receive a fixed exchange ratio of 1.12 Halliburton shares plus US$19.00 in cash. The transaction is valued at US$78.62 per Baker Hughes share, representing an equity value of US$34.6 billion and enterprise value of US$38.0 billion.
On a pro-forma basis the combined company had 2013 revenues of US$51.8 billion, surpassing Schlumberger Ltd as the number one oilfield services company in the world. Schlumberger owns M-I Swaco and generated revenues of US$45 billion in 2013.
The transaction is subject to approvals from each company’s stockholders, regulatory approvals and customary closing conditions. The companies advisors have evaluated the likely actions needed to obtain regulatory approval and are committed to completing the combination in the second half of next year. Halliburton has agreed to divest businesses that generate up to US$7.5 billion in revenues, if required, but believes that the divestitures required will be significantly less.
Both companies offer a full range of drilling services and operate barite mines and/or grinding plants in Nevada, Louisiana, and Texas. Halliburton, through Bentonite Performance Products LLC, is also a major supplier of bentonite with mines and plants in Wyoming.
Volume 28 issue 22