Halliburton Records Huge Loss in Q2
Halliburton, one of the world’s largest oilfield services providers, on Wednesday posted a loss for the second quarter of 2016, compared to a year-earlier profit, impacted by a failed merger with its rival Baker Hughes.
The company swung to a $3.21 billion loss in the second quarter of 2016, versus a profit of $54 million in the corresponding period last year.
During the quarter, Halliburton paid a $3.5 billion termination fee in conjunction with the termination of its merger agreement with Baker Hughes.
The company’s revenues for the quarter amounted to $3.8 billion, a drop compared to $5.9 billion in the same period last year.
“Our second quarter results showed resilience in the face of another challenging quarter marked by lower activity levels and continued pricing pressure around the globe,” said Dave Lesar, Chairman and CEO.
Lesar also added: “Our activity outlook has not changed and our strategy is working. During the coming recovery, we plan to scale up our integrated delivery platform by addressing our product line building blocks one at a time through a combination of organic growth and selective acquisitions.”
Offshore Energy Today
The Australian Competition and Consumer Commission (ACCC) has discontinued its review of Halliburton’s proposed acquisition of Baker Hughes after their announcement that they had abandoned the deal.
The world’s second and third biggest oilfield services providers, Halliburton and Baker Hughes, decided to terminate the merger agreement, entered into in November 2014, following a series of regulatory hurdles including the one posed by the ACCC.
The ACCC expressed strong competition concerns in October 2015 saying that the acquisition would result in the merged entity being one of only a small number of suppliers that could service the relevant markets.
Regarding the pair’s decision to drop the deal, ACCC Chairman Rod Sims said: “The ACCC was concerned that the parties are two of the ‘big 3’ global integrated oilfield services providers. These businesses have extensive product ranges, large R&D budgets and significant industry experience, and benefit from economies of scale and scope.”
“The ACCC had concerns in many markets, but was particularly concerned about the impacts on competition for complex and high risk projects, such as off-shore drilling projects,” Sims said.
The ACCC began its review on April 21, 2015. Since the October 2015 statement, the ACCC was focussed on gathering more information from the parties. The agency worked closely with a number of competition agencies including the US Department of Justice, the European Commission, the Brazilian CADE and the Competition Commission of India.
To remind, the U.S. Department of Justice filed a lawsuit to stop the proposed multi-billion merger deal between Baker Hughes and Halliburton in April as its investigation revealed serious antitrust problems with the proposed deal.