How To Play A Potential Collapse In The HAL/BHI Merger

Oilprice.com ^ | 12-11-2015 | HALBHI

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The Baker Hughes/Halliburton merger saga continues to drag on. Jefferies recently downgraded the probability of the deal being completed from 85 percent to 67 percent, indicating concern over the antitrust review being run by the U.S. government. Haliburton will have to sell roughly $7.5 billion in assets to get regulatory approval for the deal. More importantly though, it will have to sell those assets to a single buyer.

Given that price tag, conglomerates General Electric and Siemens look like the most likely buyers. There is always the possibility of a dark horse bidder like Berkshire Hathaway or Blackstone, but that would be an unusual move for either party. Competitor Schlumberger is off the table as a buyer given the competitive concerns that such a sale would create both from the point of view of the Department of Justice and Halliburton itself.