Energy, Utilities & Water  November 17, 2014

Halliburton to buy Baker Hughes

Halliburton Co. (NYSE: HAL) shares fell 10 percent following an announcement Monday that the oil field services company plans to acquire Baker Hughes Inc. (NYSE: HAL).

Halliburton shares fell to as low as $49.59 on Monday after the Houston-based company said it would acquire oil field services firm Baker Hughes in a stock-and-cash deal valued at $34.6 billion.

Halliburton is said to perform most of the hydraulic fracturing services in Weld County. The company, which employs 1,200 people at a facility in Fort Lupton, employs 80,000 people worldwide.

Houston-based Baker Hughes, which employs 61,000 people worldwide, has a far smaller presence in Northern Colorado.

Baker Hughes Oilfield Operations, doing business as Pressure Pumping as well as Completions and Fishing, operates a facility near Brighton. Baker Petrolite, a subsidiary of Baker Hughes, is located in Evans.

Halliburton’s stock has dropped 33 percent on lower oil prices from its 52-week high of $74.33 on July 23.

Baker Hughes shares surged more than 10 percent to $66. 15 on Monday, though still below its 52-week-high of $75.64.

The transaction values Baker Hughes stock at $78.62 per share. Baker Hughes stockholders will own 36 percent of the combined company, receiving 1.12 Halliburton shares plus $19 in cash for each share they own.

Boards of directors for both companies unanimously approved the deal. The acquisition would rival No. 1 oil field services company Schlumberger (NYSE: SLB), which plans to build a $10.5 million facility in the Great Western Industrial Park in Windsor.

“We expect the combination to yield annual cost synergies of nearly $2 billion,” Halliburton CEO Dave Lesar said in a statement. “As such, we expect that the acquisition will be accretive to Halliburton’s cash flow by the end of the first year after closing and to earnings per share by the end of the second year.

The savings will come from operational improvements, personnel reorganization, real estate and other administrative and organizational efficiencies, the company said in the statement.

Halliburton posted 2013 revenue of $29.4 billion, up from $28.5 billion in 2012. Baker Hughes reported 2013 revenue of $22.36 billion compared with $21.36 billion in 2012.

Halliburton said it has agreed to divest businesses that generate as much as $7.5 billion in revenue if required by regulators. The company, however, believes the value of the required divestments will be “significantly less.”

The company also has agreed to pay a $3.5 billion fee if the deal does not receive antitrust approvals.

Halliburton expects the deal to close in the second half of next year.

Halliburton Co. (NYSE: HAL) shares fell 10 percent following an announcement Monday that the oil field services company plans to acquire Baker Hughes Inc. (NYSE: HAL).

Halliburton shares fell to as low as $49.59 on Monday after the Houston-based company said it would acquire oil field services firm Baker Hughes in a stock-and-cash deal valued at $34.6 billion.

Halliburton is said to perform most of the hydraulic fracturing services in Weld County. The company, which employs 1,200 people at a facility in Fort Lupton, employs 80,000 people worldwide.

Houston-based Baker Hughes, which employs 61,000 people worldwide, has a far smaller presence in Northern…

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