Halliburton Co. will do “whatever is necessary” to win antitrust approval to buy Baker Hughes Inc., including selling additional assets to satisfy regulators, according to ValueAct Capital Management, which owns stakes in both companies.
The activist fund said in a letter to its investors, which was obtained by Bloomberg News, that after discussions with the two oil field services companies, it’s confident the deal is on track and will close.
“In our conversations with Halliburton’s management team, it is clear that they remain committed to doing whatever is necessary to close the deal,” ValueAct said in its third-quarter report. “They are far along in the process to divest multiple duplicative business lines and will offer up additional divestitures if necessary.”
Spokesmen for Halliburton and Baker Hughes didn’t immediately respond to requests for comment.
The letter may ease concerns about the deal’s prospects among investors, who have grown increasingly worried that the tie-up could be in trouble with regulators. The difference between Halliburton’s offer price for Baker Hughes and the target company’s stock price in percentage terms peaked on Nov. 13.
Antitrust officials around the world are scrutinizing Halliburton’s takeover of Baker Hughes. The companies have announced plans to sell several business lines to resolve antitrust concerns and are in talks with regulators about possible additional asset sales that may be needed to win approval, according to a person familiar with the matter.
The deal, valued at $34.6 billion when it was announced a year ago, would unite the second and third-largest oilfield service companies, bulking up Halliburton to compete with industry leader Schlumberger Ltd.
Halliburton has committed to selling assets with up to $7.5 billion in revenues to win antitrust clearance. Asset sales announced as of September amounted to $5.2 billion in 2013 revenue.
Analysts at Jefferies said in a note this month that there were “worrying signs” the deal could fall apart, including continuing scrutiny by the European Commission.
Halliburton has yet to start the formal review in the European Union, likely pushing a decision there into 2016, according to Bloomberg Intelligence. The U.S. Justice Department’s review is set to end Dec. 15, though it could be extended.