Halliburton and Baker Hughes have reached a definitive agreement, under which Halliburton will acquire all outstanding shares of Baker Hughes in a stock and cash transaction.
The transaction is valued at US$ 78.62 per share, representing an equity value of US$ 34.6 billion. Upon completion of the transaction, Baker Hughes stockholders will own approximately 36% of the combined company.
Dave Lesar, Chairman and CEO, Halliburton
“We are pleased to announce this combination with Baker Hughes, which will create a bellwether global oilfield services company and offer compelling benefits for the stockholders, customers and other stakeholders of Baker Hughes and Halliburton. The transaction will combine the companies’ product and service capabilities to deliver an unsurpassed depth and breadth of solutions to our customers, creating a Houston-based global oilfield services champion, manufacturing and exporting technologies, and creating jobs and serving customers around the globe.
“The stockholders of Baker Hughes will immediately receive a substantial premium and have the opportunity to participate in the significant upside potential of the combined company. Our stockholders know our management team and know we live up to our commitments. We know how to create value, how to execute, and how to integrate in order to make this combination successful. We expect the combination to yield annual cost synergies of nearly US$ 2 billion. 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. We anticipate that the combined company will also generate significant free cash flow, allowing for the return of substantial capital to stockholders.”
Martin Craighead, Chairman and CEO of Baker Hughes
“This brings our stockholders a significant premium and the opportunity to own a meaningful share in a larger, more competitive global company. By combining two great companies that have delivered cutting-edge solutions to customers in the worldwide oil and gas industry for more than a century, we will create a new world of opportunities to advance the development of technologies for our customers. We envision a combined company capable of achieving opportunities that neither company would have realized as well –or as quickly – on its own, all while creating exciting new opportunities for employees.”
Lesar concluded: “We believe that the expertise of both companies’ employees and leaders will be a competitive advantage for the combined company. Together with the people of Baker Hughes, we will establish a team to develop a detailed and thoughtful integration plan to make the post-closing transition as seamless, efficient and productive as possible. We look forward to welcoming the talented employees of Baker Hughes and are pleased they will be joining the Halliburton team.”
Adapted from press release by Katie Woodward
Read the article online at: https://www.energyglobal.com/upstream/drilling-and-production/17112014/halliburton-and-baker-hughes-in-merger-1819/