Halliburton Co. (NYSE: HAL) has acquired Baker Hughes Inc. (NYSE: BHI) for $34.6 billion.
The Houston-based companies reached a definitive agreement on Nov. 17, under which Halliburton will acquire all the outstanding shares of Baker Hughes in a stock and cash transaction. The transaction is valued at $78.62 per Baker Hughes share, representing an equity value of $34.6 billion and enterprise value of $38 billion, based on Halliburton’s closing price on Nov. 12, which was the day prior to public confirmation by Baker Hughes that it was in talks with Halliburton regarding the transaction.
This deal — which is one of the largest in the energy industry deals in years — was approved unanimously by both companies’ boards of director
“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,” Dave Lesar, chairman and CEO of Halliburton, said in a statement.
Once the deal is complete, Baker Hughes stockholders will own 36 percent of the combined company.
“This brings our stockholders a significant premium and the opportunity to own a meaningful share in a larger, more competitive global company,” Martin Craighead, chairman and CEO of Baker Hughes, said in a statement.
Stockholders of Baker Hughes will receive, for each Baker Hughes share, a fixed exchange ratio of 1.12 Halliburton shares plus $19 in cash. Halliburton intends to finance the cash portion of the acquisition through a combination of cash on hand and fully committed debt financing.
Halliburton has agreed to divest businesses that generate up to $7.5 billion in revenues, if required by regulators, and also to pay a fee of $3.5 billion if the transaction terminates due to a failure to obtain the required antitrust approvals.
On Nov. 13, Baker Hughes confirmed that it was in preliminary discussions with Halliburton about potentially combining the two companies. However, on Nov. 14, it looked like those merger talks had stalled.
The two companies have a combined revenue of $51.8 billion and more than 136,000 employees worldwide, and operate in more than 80 countries. The new company will have 15 board members, including three from Baker Hughes. Dave Lesar will continue as CEO of Halliburton.
The deal is expected to close in the second half of 2015.
Switzerland-based Credit Suisse is serving as lead financial adviser and New York-based BofA Merrill Lynch is also serving as financial adviser to Halliburton. Houston-based Baker Botts LLP and New York-based Wachtell, Lipton, Rosen & Katz are serving as Halliburton’s legal counsel.
New York-based Goldman, Sachs & Co. is serving as financial adviser to Baker Hughes. New York-based Davis Polk & Wardwell LLP and Boston- and Washington, D.C.-based Wilmer Cutler Pickering Hale and Dorr LLP are serving as Baker Hughes’ legal counsel.
sourced from www.bizjournals.com Novemeber17 , 2014