Halliburton, Baker Hughes Busted for $34 Billion Oilfield Heist

The $34 billion oilfield heist was foiled yesterday when Halliburton and Baker Hughes ditched their planned merger, which would have left the oilfield service markets in the hands of a duopoly.

The U.S. economy and American consumers can breathe a sigh of relief as the companies’ decision to abandon the deal is seen as a victory for them.

Attorney General Loretta E. Lynch hailed the decision, saying, ‘The companies’ decision to abandon this transaction – which would have left many oilfield service markets in the hands of a duopoly – is a victory for the U.S. economy and for all Americans.’

Lynch added, ‘This case serves as a stark reminder that no merger is too big or too complex to be challenged, and that the hardworking men and women of the Antitrust Division stand ready, willing and able to vigorously enforce the nation’s antitrust laws when companies propose deals that would enhance shareholder value at the expense of consumer interests.’

According to the complaint filed by the government, Halliburton had offered to divest certain assets in an effort to address the competitive concerns. However, the proposal was deemed inadequate as it did not include full business units, withheld many critical assets and personnel, involved numerous ongoing entanglements between the merged company and the divestiture buyer, and generally failed to replicate the robust competition between the parties that exists today.

Before the lawsuit was filed, Halliburton, a Delaware corporation headquartered in Houston, was set to merge with Baker Hughes, a Delaware corporation also headquartered in Houston. The merger would have left the oilfield service markets in the hands of a duopoly, raising prices, decreasing output, and lessening innovation in at least 23 oilfield products and services critical to the nation’s energy supply.

Halliburton, founded in 1919, is the largest provider of services and products to the oil and gas industry in the United States. It has operations in approximately 80 countries and earned revenue of $23.6 billion in 2015. Baker Hughes, formed in 1987 with the merger of Baker International and Hughes Tool Company, is the third-largest provider of oilfield services in the world and operates in more than 80 countries, earning revenue of $15.7 billion in 2015.

Deputy Assistant Attorney General David I. Gelfand of the Antitrust Division commended the enforcement partners around the world for their close and constructive collaboration on this matter, especially from the European Commission, Australia, Brazil, and Mexico.

The $34 billion oilfield heist has been foiled, and consumers can rejoice in the decision made by Halliburton and Baker Hughes to abandon their planned merger.

Related Federal Cases