Halliburton and Baker Hughes have terminated the merger agreement they entered into in November 2014, effective April 30, 2016.
In connection with the termination of the merger agreement, Halliburton will pay Baker Hughes the termination fee of $3.5 billion by Wednesday, May 4, 2016.
To remind, the U.S. Department of Justice filed a civil antitrust lawsuit in April to stop the merger between two of the world’s largest oilfield-services companies as it believed the deal would lead to higher prices and eliminate competition.
“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 CEO of Halliburton.
“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 CEO 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.”
Halliburton said it will discuss the termination of the merger agreement during its previously scheduled conference call on Tuesday, May 3, 2016.