In an apparent setback for Halliburton Company’s (NYSE:HAL) acquisition of Baker Hughes Incorporated (NYSE:BHI), the European Union dragged its feet seeking more details of the deal. As a result, the EU halted the deadline for the review blaming the companies for having failed to provide the necessary information. The deal is worth about $35 billion, and the current deadline is June 23. The recent move meant that there would be a delay in the merger of the two oil companies.
Bloomberg quoted an EU official as saying that this was a normal process of investigation regarding the mergers. Therefore, there was nothing new in respect to the deal. The official said that the current environment calls for the suspension of the deadline until the key information is provided to regulators. The deadline would also be adjusted based on the supply of the information sought by the regulator.
This was not the first time that the transaction has faced hurdles at the hands of the EU. Last year, the EU withheld the review process for the transaction by four months following the rejection of the initial filing by the two companies. The deal involves cash and stock and was struck in November 2014. Also, it was originally scheduled to be completed in 2015. However, the completion of the transaction is getting delayed as both firms are seeking the approval of the anti-trust regulator in Europe and the US.
Selling More Assets
Halliburton is said to be selling more businesses so that it stands a better chance of getting approval from the regulators. For that purpose, it also intended to sell its offshore drilling and fluids division apart from most of the completion systems. However, the company’s spokesperson refused to confirm or deny the reports.
On January 12, the EU merger regulator launched an in-depth investigation into the Halliburton–Baker Hughes deal. The regulator was concerned that the integration between the third and the second biggest oil and gas service suppliers might hamper competition and increase prices.