Mon, Sep. 28, 8:06 AM
- Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) announce plans to sell additional businesses in connection with their pending $35B merger.
- HAL will divest its expandable liner hangers business, while BHI will divest its core completions business, which includes its packers, flow control tools and subsurface safety systems; its sand control business in the Gulf of Mexico; and its offshore cementing businesses in Australia, Brazil, the Gulf of Mexico, Norway and the U.K.
- HAL and BHI say the businesses being divested amassed $5.2B in revenue in 2013, but have not reached an agreement with regulators about the adequacy of the divestitures.
- The companies also say they have pushed back the U.S. Justice Department’s antitrust review period by three weeks, to mid-December from Nov. 25, after previously extending the period in July.
Mon, Sep. 21, 11:39 AM
- Weatherford's (WFT -9%) plan to raise $1B fuels speculation that the company is gearing up for an acquisition, possibly a piece of the asset sales Halliburton (HAL +0.9%) needs to gain regulatory approval for its proposed $35B buyout of Baker Hughes (BHI +2.4%).
- WFT’s announcement “lends credibility” to the mounting speculation that HAL soon may unveil a buyer for the first two of its required divestitures, some analysts say.
- The deal spread on the HAL-BHI transaction currently stands at ~14% as concerns remain as to whether necessary asset sales can be completed and the transaction can be closed.
Mon, Sep. 14, 5:15 PM
- GE has made offers in recent weeks for parts of the drilling services and drilling bits businesses Halliburton (NYSE:HAL) is selling to win regulatory approval to buy Baker Hughes (NYSE:BHI), Bloomberg reports.
- Weatherford (NYSE:WFT) and Nabors Industries (NYSE:NBR) also are bidding for the services entity, which is part of HAL's Sperry Drilling arm, according to the report; a number of P-E firms and industrial companies also are said to be bidding for the businesses.
- HAL said last week it was selling the units separately and considering bids from “a variety of interested parties” after the NY Post reported the Justice Department could force it to sell the assets to a single buyer.
- Final offers for both units are due within four weeks, Bloomberg says.
Fri, Sep. 11, 8:12 AM
- Halliburton (NYSE:HAL) -1.2% premarket following a NY Post article that says the Justice Department wants it to find a single buyer for ~$7.5B of assets instead of selling them to different suitors in order to gain approval of the company's proposed purchase of Baker Hughes (NYSE:BHI).
- DoJ’s single-buyer mandate leaves HAL with few options other than selling the package of assets to the likes of GE or Siemens (OTCPK:SIEGY), according to the report; it is not known if either company is willing to pay a reasonable price for the assets.
Fri, Sep. 4, 12:23 PM
- Sclumberger’s (NYSE:SLB) purchase of Cameron International (NYSE:CAM) should easily close, with optimism growing that Halliburton's (NYSE:HAL) bid for Baker Hughes (NYSE:BHI) also will close, and the deals mean more oil company M&A is on the way, FBR Capital analyst Thomas Curran believes.
- The wave of heavyweight deals likely is not over yet, Curran says, seeing Weatherford (NYSE:WFT) as the highest probability takeout with the broadest set of plausible strategic suitors; National Oilwell Varco (NYSE:NOV) is viewed as having a high likelihood of entering into a big deal, although probably as an acquirer, and FMC Tech (NYSE:FTI) could puruse a full combination with Technip, its 50/50% JV partner in Forsys Subsea.
Fri, Aug. 28, 11:29 AM
- Traders willing to bet Halliburton's (HAL +1.4%) proposed deal for Baker Hughes (BHI +1.2%) can survive regulatory scrutiny stand to amass more than $3B in profit, and Schlumberger’s (SLB +1.9%) purchase of Cameron International (CAM +1.7%) could help their chances, according to a Bloomberg analysis.
- With SLB - already the world’s largest oilfield-services provider - getting even bigger, HAL and BHI could have a better argument that they need to merge to get stronger, and the deal could provide more incentive for contractors to bid on HAL and BHI assets as they seek to stay competitive; HAL and BHI have committed to divest as much as $7.5B in assets, and several buyers appear to be interested.
- HAL shares stand to drop sharply without a deal, it would not have the merger’s cost-cutting opportunities to shield it from the slump in oil prices and shrinking revenue, and it would have to pay a $3.5B breakup fee if the deal fails to gain regulatory approval.
Wed, Aug. 26, 3:25 PM
- Analysts say Schlumberger’s (SLB -4.2%) acquisition of Cameron International (CAM +41.7%) is not particularly surprising, given SLB's two years of experience working alongside CAM through their OneSubsea joint venture and track record of soaking up JV partners.
- The combination effectively allows the two companies to extract the type of cost savings found at OneSubsea across the rest of their businesses; SLB thinks it can find pretax benefits of $600M in the second year after the deal, most of which will come from cost-cutting.
- Citigroup says the deal will firmly establish SLB as the dominant and most diversified oilfield service provider, with total estimated revenues for the combined entity of $46B in 2015, a figure the prospective Halliburton (HAL +2.3%) and Baker Hughes (BHI +2.5%) combo cannot match.
- SLB is making a strategic bet on a recovery in deepwater drilling, even if not in 2016, Tudor Pickering says; with 7M-plus bbl/day of global oil production coming from deepwater reservoirs, it makes sense that offshore activity eventually will rebound.
- The deal is not likely to touch off an M&A wave in the oilfield services industry because the global crude slump has strained the finances of many companies, leaving few able to make such a move, says Edward Jones analyst Rob Desai.
- But several potential acquisition targets in the services industry are higher: OII +8.3%, DRQ +7.4%, FTI +6.5%, NOV +4.1%, FET +3%.
Tue, Aug. 25, 6:29 PM
- The global market selloff and plunging oil prices have increased fears that some of this year’s largest takeover deals are at risk of falling apart, including Royal Dutch Shell’s (RDS.A, RDS.B) ~$70B offer for BG Group (OTCPK:BRGXF, OTCQX:BRGYY), Financial Times reports.
- Over the past week, the gap between the agreed price of several takeovers and the market price of the target companies’ shares has widened, which usually is interpreted as a signal of declining confidence that the transaction will complete as planned.
- Bets on the outcome of Shell’s deal represented the biggest trades being made by so-called event-driven hedge funds in Europe, at least one broker tells FT.
- Another deal spread to reach its widest level this week was that between Halliburton’s (NYSE:HAL) $35B offer for Baker Hughes (NYSE:BHI) and the target group’s market value.
Mon, Aug. 3, 3:16 AM
- Although it still looks shaky, Halliburton (NYSE:HAL) has received a request from the European Commission for additional information about its proposed $35B merger with rival Baker Hughes (NYSE:BHI).
- Halliburton has also responded to a second request made by U.S. antitrust officials considering whether to approve the merger.
- Should the deal go through, the combined company would overtake Schlumberger as the world's No. 1 oilfield services provider.
- Previously: Report: Halliburton facing antitrust scrutiny in planned Baker Hughes deal (Jul. 22 2015)
Thu, Jul. 23, 8:42 AM
- Analysts at Morgan Stanley and Deutsche Bank largely dismiss yesterday's report on antitrust hurdles in Halliburton's (NYSE:HAL) proposed takeover of Baker Hughes (NYSE:BHI) as mostly noise.
- Morgan Stanley analyst Ole Slorer says he spoke with an antitrust expert and concludes the article merely summarized well known facts, saying HAL's "exceptionally diligent" handling of the transaction has minimized risks.
- Deutsche Bank's Mike Urban says issues raised in the article have been a "widespread investor concern for the past couple of months," and continues to believe the deal ultimately will close.
- Slanley raises HAL's price target to $62 from $60 and BHI to $88 from $86, maintaining Overweight ratings on both stocks; Deutsche Bank keeps a Buy rating on HAL with a $68 price target.
Wed, Jul. 22, 12:51 PM
- Halliburton’s (HAL -3.2%) takeover of Baker Hughes (BHI -7.6%) is facing resistance from U.S. Justice Department officials who are concerned the deal could hurt competition, Bloomberg reports, sending shares tumbling.
- Although HAL has proposed selling some assets to other companies, antitrust enforcers reportedly are not convinced its plan would restore sufficient competition.
- The DoJ's antitrust division is positioned to carry out a legal challenge if it decides to try to halt the deal, and has assigned veteran litigator John Read to oversee the review, according to the report.
Mon, Jul. 13, 2:55 PM
- Analysts continue to believe the merger of Halliburton (HAL +1.1%) and Baker Hughes (BHI +0.6%) will still go through, after the two companies agreed to extend the period for the Department of Justice review of the deal to the later of Nov. 25, 2015 or 90 days.
- Oppenheimer's James Schumm says the extension "does not change our thinking or have any impact on our estimates" for a year-end 2015 closing; beyond the DoJ, HAL and BHI still need approval from other international regulators, notably in the European Union, and Schumm expects many to "piggyback" on the DoJ decision.
- Sterne Agee analysts also believe the deal will close around year-end and expect the deal spread to close gradually over the next several months; the firm maintains a Buy rating on both stocks but prefers BHI as a less expensive way to own HAL longer term.
Fri, Jul. 10, 5:25 PM
- Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) say they agree to extend until at least Nov. 25 the Department of Justice's review period for the merger of the oilfield services companies.
- HAL also says it has proposed plans with various competition enforcement authorities around the world to divest more businesses than had been previously announced.
- The companies say they now expect the $35B acquisition to close by Dec. 1.
Tue, Jun. 9, 8:55 PM
- GE's $12B deal to sell its U.S. private-equity lending business to Canada Pension Plan Investment Board is just the beginning of its plan to shed ~$200B of GE Capital assets - and a whole lot of cash to spend on takeovers.
- Although GE may not make a move right away as it tries to complete the $14B purchase of most of Alstom’s energy business, Bloomberg figures it could amass a $40B war chest for takeovers.
- Among speculated targets: Pentair (NYSE:PNR), a provider of water pumps and filtration systems; Flowserve (NYSE:FLS), a maker of industrial pumps and valves; electrical components manufacturer Hubbell (HUB.A, HUB.B); life sciences equipment maker Bio-Rad Laboratories (NYSE:BIO); and some of the assets Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) will divest as part of their merger.
- Whatever the target, acquisitions likely will be part of GE’s transformation after asset sales and returning capital to shareholders.
Tue, May 19, 11:57 AM
- Siemens' (OTCPK:SIEGY +0.2%) decision to sell $7.75B in bonds to pay for its acquisition of Dresser-Rand means it still has cash to bid for assets that Halliburton (HAL -2.6%) is preparing to sell, Bloomberg reports.
- Siemens took advantage of investor demand for dollar-denominated assets in yesterday’s debt sale, with a $1.75B tranche of 30-year bonds sold at a yield of 1.4 percentage points more than comparable treasuries; the sale helps the company retain ammunition for further deals.
- Siemens is said to be one of more than half a dozen companies eyeing the $5B-$10B in businesses that HAL is preparing to sell as it seeks regulatory approval for its acquisition of Baker Hughes.
Thu, Apr. 23, 5:49 PM
- At least a half-dozen major industrial companies - including GE, Caterpillar (NYSE:CAT) Siemens (OTCPK:SIEGY), Honeywell (NYSE:HON), Dover (NYSE:DOV), Danaher (NYSE:DHR) and Emerson Electric (NYSE:EMR) - are said to be weighing offers for oilfield services assets worth $5B-$10B that Halliburton (NYSE:HAL) is preparing to sell ahead of its pending merger with Baker Hughes (NYSE:BHI), Bloomberg reports.
- HAL reportedly will send offering materials to those companies, as well as P-E firms and rival oilfield services providers, in the coming weeks; first up likely will be the drill bits unit and another that uses data to track and steer the direction of drills.
- These companies could own an edge over oilfield services companies that analysts have pegged as logical bidders for HAL’s castoffs - such as National Oilwell Varco (NYSE:NOV) and Superior Energy Services (NYSE:SPN) - because HAL might not want to give any more market share to companies that already offer the same services, preferring to sell to new players entering the market.
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