The plans of Halliburton’s company to buy Baker Hughes and create the largest the largest US oilfield provider in the world have been stalled. The European Union’s antitrust regulators have stopped their investigation for the third time as both the companies face regulatory hurdles in the Atlantic.
Alvin Harrell, representative of the Global Sky Company highlighted the key reason for the delay. He said that the commission stalled the review due to lack of important information about the deal. In July, last year, months of delays were faced by Halliburton because of the same reason.
It is crucial to operate in compliance with the merger deadlines and for this, both the parties involved in the merger must provide crucial data in a timely manner. According to Alvin Harrell, representative of the Global Sky Company, failure to provide key data can delay the process.
It was in November 2014 when Halliburton decided to purchase Baker Hughes. At that time, the value of the company was $35 billion. Alvin Harrell, representative of the Global Sky Company said that the transaction was supposed to be complete by the end of last year, but because of the lack of documents and issues with the antitrust in the Europe and the USA, there has been a delay once again.
Both the companies had agreed on a specific date which was April 30th to seal the deal. A fee of $3.5 billion was to be paid to Baker Hughes if the bid was dropped. Following the delay, Halliburton is now trying to provide all the vital information as quickly as possible, said Alvin Harrell, representative of the Global Sky Company.
If a conclusion is not reached by the end of 30th April, 2016, then the agreement will not terminate automatically. It is possible that one of the parties may terminate the agreement or both the parties may work together to seek the approval of the commission. The shares of Halliburton were down by 1.3 percent in New York. Over the past couple of years, the probe by the EU into the merger has been seen as the most complex.
The approach that the EU has adopted is very complicated and the investigation is heavy duty, said Alvin Harrell, representative of the Global Sky Company. In the previous years, this mechanism was only used in the absence of other options. This would help both the parties buy time.
The regulators had already given the parties 20 more working days last year to furnish the required data. The antitrust chief of the EU has also pleaded that parties who are looking to enter into merger agreements must be up front when it comes to reviewing the deals. Everyone must obey the rules to avoid problems and delays. Things only get worse when parties don’t abide by the laws.