Halliburton and Baker Hughes Incorporated have said they intend to ‘vigorously contest the U.S. Department of Justice’s (DOJ) effort to block’ their pending merger.
Namely, the DOJ filed a civil antitrust lawsuit on Wednesday to stop the merger between two of the world’s largest oilfield-services companies as it believes the deal would lead to higher prices and eliminate competition.
However, the two companies said they believe that the DOJ has reached the wrong conclusion in its assessment of the transaction and that its action is counterproductive, especially in the context of the challenges the U.S. and global energy industry are currently experiencing.
According to Halliburton and Baker Hughes, the proposed merger is ‘pro-competitive’ and would allow the companies’ customers to benefit from a more flexible, innovative, and efficient oilfield services company.
Divestiture package
Early in the process, Halliburton proposed to the DOJ a divestiture package worth billions of dollars that will facilitate the entry of new competition in markets in which products and services are being divested. Both companies said they strongly believe that the proposed divestiture package, which was significantly enhanced, is more than sufficient to address the DOJ’s specific competitive concerns.
The companies informed they intend to demonstrate that the DOJ has underestimated the highly competitive nature of the oilfield services industry, the many benefits of the proposed combination, and the sufficiency of the divestitures.
“Once completed, the transaction will allow customers to operate more cost effectively, which is especially important now due to the state of the energy industry and oil and gas prices.
“Halliburton and Baker Hughes look forward to a full, impartial judicial review of the pending transaction, including the sufficiency of the proposed divestitures.”
Halliburton and Baker Hughes previously agreed to extend the time period to obtain regulatory approvals to no later than April 30, 2016, as permitted under the merger agreement. If the judicial review extends beyond April 30, 2016, the parties said they may continue to seek relevant regulatory approvals or either of the parties may terminate the merger agreement.