Halliburton Co. and Baker Hughes Inc. have until the end of Saturday to obtain antitrust approval from regulators or either side can walk away from a deal matching the world’s No. 2 and No. 3 oil service firms.
If the $28 billion deal fails, Halliburton must pay Baker Hughes a $3.5 billion termination fee. Halliburton Co. sold $7.5 billion in notes in November, which built up its cash reserve to a record of more than $10 billion -- a stockpile that will help cover the fee.
Halliburton announced the Baker Hughes takeover in November 2014 in a bid to better compete against industry leader Schlumberger Ltd. The U.S. Justice Department had filed a lawsuit in early April to stop the merger, saying it threatens to eliminate head-to-head competition in 23 products and services used in oil exploration.
Halliburton has been adding assets to the list of businesses it plans to sell to gain antitrust approval. The company plans to divest Baker Hughes’s offshore drilling-and-completions fluids division and the bulk of Baker Hughes’s completion systems, people familiar with the matter said last month. This comes on top of two other batches of overlapping business lines Halliburton pledged to sell to assuage the Justice Department’s concern.