US: Halliburton, Baker send shockwaves through oil market

Two US oilfield service giants sent shockwaves throughout the oil industry late last week with news of their merger talks.

Halliburton and Baker Hughes are reported to be discussing a possible merger, one that experts say would likely fuel further energy industry consolidation as companies across the globe react to falling gas prices.

Unnamed sources said Friday that merger talks between the two rivals have stalled due to disagreements over price and other issues. But industry experts say whether a deal between Halliburton and Baker actually goes through, the oil sector is likely to see consolidation to assure oil drilling remains profitable amid falling gas prices.

A deal between the companies – two of the world’s largest oilfield service companies – could be valued between $20 billion and $31 billion, experts say, and would create a behemoth for US onshore fracking, overtaking current industry leader Schlumberger. But the transaction would likely face hefty antitrust scrutiny. Halliburton is said to be expecting such scrutiny; one unnamed source said the company is already considering setting up a unit comprised of assets the company would be willing to divest to secure regulatory clearance for the deal.

Full content: Bloomberg

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