San Francisco (AFP) - US oil services companies Halliburton and Baker Hughes have announced they were calling off their massive multibillion-dollar proposed merger that had met strong resistance from regulators.
The deal, announced in November 2014, foresaw a $34.6 billion takeover by Halliburton of its rival, creating a powerful competitor to global industry leader Schlumberger.
"Challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action," Halliburton's chairman and chief executive, Dave Lesar, said in a joint statement.
Earlier this month, US antitrust officials filed suit to block the proposed merger, agreed to in response to plunging oil prices, saying it would eliminate competition, raise prices and reduce innovation in the oil services business.
The Justice Department said the transaction would eliminate head-to-head competition in markets for 23 products or services, creating a virtual duopoly for key oil services such as offshore well completions and on- and offshore cementing.
It said the merger would remove the incentives for two industry leaders to improve technology and that low oil prices did not justify a bad deal for consumers.
Halliburton and Baker Hughes -- the world's number two and three oil services companies, which provide well service and drilling products to large oil companies like ExxonMobil and Total -- said at the time they would "vigorously contest" the case.
They argued that the deal would provide customers with better access to top technology and lower the cost of producing oil.
US oil services companies Halliburton and Baker Hughes have called off their proposed $34.6 billion merger (AFP Photo/Mira Oberman)
