Baker Hughes puts positive spin on pending merger with Halliburton

HOUSTON – The relations with Baker Hughes and Halliburton changed quickly over the weekend from acrimonious posturing in preparation of a hostile takeover to one of brotherly love once the merger agreement was announced early Monday morning.

In a memo to employees, Baker Hughes CEO Martin Craighead referred to the two former industry rivals as “best-in-class companies, each with a heritage dating back more than 100 years.”

“The proposed transaction brings together highly complementary capabilities,” Craighead said. “It combines Baker Hughes’ strengths in technology and manufacturing with Halliburton’s scale and supply chain expertise. At the same time, there are a number of parallels between our two companies, including similar core values and a heritage of innovation. We expect the combined company to achieve opportunities that neither company could have reached as well or as quickly while standing alone.”

Craighead said the process to gain approval from the stockholders of both companies and regulatory authorities to take up to a year.

According to the merger agreement as reported by Bloomberg, Baker Hughes shareholders will receive 1.12 Halliburton shares plus $19 in cash for each share, a 31% premium to Baker Hughes’ Nov. 14 closing price. Halliburton will have to pay a termination fee of $3.5 billion if the merger does not take place.

Halliburton has agreed to divest businesses with revenues of up to $7.5 billion, if the U.S. Justice Department regulators make such a demand. The combined company will be a slightly bigger than half the size of Schlumberger, Ltd.