The Justice Department announced it filed court papers this morning to block Halliburton Co.’s purchase of Baker Hughes—the largest oil field services acquisition ever proposed—warning the deal could hamper competition in oil-equipment markets, “raise prices and reduce innovation” in the industry.
As FuelFix.com reports, the Justice Department claims the deal would prevent industry competition in 23 products and services used in oil exploration both onshore and offshore. It filed the suit in the Delaware federal court.
“The proposed deal between Halliburton and Baker Hughes would eliminate vital competition, skew energy markets and harm American consumers,” U.S. Attorney General Loretta Lynch says in a written statement. “Our action makes clear that the Justice Department is committed to vigorously enforcing our antitrust laws.”
The combination of the world’s second and third-biggest oil field service companies, both based in Houston, was first proposed as a $35 billion deal in November 2014 and has been tied up in reviews by U.S. and European trust-busters for about a year, and an antitrust suit could take years to resolve.
In a joint statement this morning, Halliburton and Baker Hughes said they’ll “vigorously” contest the suit.
“The companies believe that the DOJ is wrong in its assessment of the transaction and that its action is counterproductive, especially in the context of the challenges the U.S. and global energy industry are currently experiencing,” the companies say in a the statement.
