Halliburton, Baker Hughes agree to merge

Two of the largest oil-field services companies have agreed to merge.

Halliburton Co. and Baker Hughes Inc. signed a definitive agreement for the stock-and-cash acquisition by Halliburton of all outstanding Baker Hughes shares. Equity value of the deal is $34.6 billion, based on Halliburton’s closing price on Nov. 12.

At completion, Baker Hughes stockholders will own about 36% of the combined company.

Dave Lesar, Halliburton chairman and chief executive officer, said the deal is expected to “yield annual cost synergies of nearly $2 billion.”

The combined company had pro forma 2013 revenue of $51.8 billion.

Halliburton agreed to divest businesses generating as much as $7.5 billion/year in revenue if required by regulators and will pay a fee of $3.5 billion if the transaction fails to win antitrust approval.