US Justice Department sues to block Halliburton-Baker Hughes merger deal
Apr 07, 2016 08:28 PM EDT
On Wednesday, the US Justice Department filed an antitrust lawsuit challenging Halliburton's intended acquisition of rival Baker Hughes. The merger is believed to eliminate critical competition in the energy markets and threaten higher prices.
The Wall Street Journal reported that the lawsuit was filed in a Delaware federal court. The Justice Department intends to prevent the $34.6 billion merger of oilfield services giants, which the department claims would reduce innovation in the oil services industry.
The Justice Department also argued that the Halliburton and Baker Hughes deal would surely eliminate head-to-head rivalry in markets for 23 services or products used on offshore oil production and exploration in the US. Attorney General Loretta Lynch said the agreement would also skew energy markets and harm American consumers, reports CBS News. Lynch reiterated that the Justice Department is committed to vigorously enforce antitrust laws.
Smith announced in a meeting that the agency is currently accepting bids for a contract to manage and renovate rooms in Rosebud, Winnebago and Pine Ridge. The bidding will soon open for a contract to administer region-wide services for telemedicine. This allows patients to access physicians remotely through video, the internet, and other technology. The services are aimed at focusing on emergency medicine and behavioral health.
Halliburton and Baker Hughes are two of the three largest integrated oilfield service companies across the world. The companies compete to sell and invent products and services that are vital to energy exploration and production. The attorney general claimed that the country needs to maintain meaningful competition in the sector of the economy.
According to USA Today, with a combined revenue of $39 billion in 2015, the two companies control nearly 16 percent market share in the oilfield services sector. Both Halliburton and Baker Hughes also provide wide range services such as drilling, cementing, and oil-well completions.
The lawsuit comes as the US oil and gas industry is struggling with the decline of oil prices. The rock-bottom oil prices have sparked multiple bankruptcies and more than 320,000 job cuts globally since 2014.