Shotgun Wedding: Halliburton Forces Baker Hughes to Sell
That was fast. Last week MDN told you the scuttlebutt that the second largest oilfield services company in the U.S., Halliburton, was “in talks” to buy the third largest oilfield services company in the U.S., Baker Hughes (see Big News: Halliburton in Talks to Buy Baker Hughes). The “talks” advanced quickly. Yesterday the two companies announced they will tie the knot in something of a shotgun wedding (which we explain below). Halliburton is paying a dowry of $34.6 BILLION in stock and cash to buy out Baker Hughes, lock, stock and barrel…
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The biggest news to hit the oil and gas industry in recent memory happened yesterday. The financial press lit up (and ran HUNDREDS of stories) about the leak/announcement/news that oilfield services company Halliburton is “in talks” to buy out rival Baker Hughes. The largest oilfield services company in the U.S. (and in the world) is Schlumberger, followed by Halliburton (again, in both the world and in the U.S.). Baker Hughes (BH) is the fifth largest oilfield services company in the world, but #3 in the U.S. Halliburton’s market capitalization this morning–price per share times outstanding number of shares–is $47.65 billion. Baker Hughes’ market cap is $26.59 billion, up $5 billion since yesterday afternoon when the news broke. Combined, the two companies would be worth $74.24 billion and employ (if there are no layoffs) 144,000 people. Schlumberger’s market cap, by comparison, is $127.62 billion with 126,000 employees. Both Halliburton and BH are heavily involved in providing all sorts of services (rigs, fracking, logistics, etc.) for exploration & production companies in both the Marcellus and Utica, as well as every other major shale play in the U.S. AND in every conventional play around the world…
Baker Hughes is the world’s fifth largest oilfield services company. Schlumberger and Halliburton are numbers one and two, respectively. Oilfield services companies provide drilling equipment and yes, even fracking equipment (and fracking fluids) that power the shale revolution. Baker Hughes, with a large presence in the Marcellus/Utica, has just donated (for the second year in a row) $100,000 to Susan G. Komen®, the world’s leading breast cancer organization, to help in the effort to find a cure for breast cancer. Anyone alive over the age of 30 almost certainly has a relative or friend who is or has been afflicted by this disease. Doing what we can to fight it is something we all can get behind. But because some wacko anti-drillers make wild claims that fracking fluids “cause cancer”–even though fracking fluids contain many of the same chemicals in the stuff under your kitchen sink–some lib groups (incredibly) oppose the donation and efforts by Baker Hughes, saying it is blood money and “pink washing” the fracking industry…