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.