Halliburton acquires Baker Hughes

HOUSTON, Nov. 17 (UPI) -- Halliburton's chairman said Monday his company will acquire rival Baker Hughes, noting expertise from both sides would give the entity a competitive advantage. Halliburton acquires Baker Hughes in a deal that first surfaced publically last week.

David Lesar, Halliburton's CEO, said the combined company would create a "bellwether global oilfield services company" that would trade under the Halliburton ticker, HAL.

"We believe that the expertise of both companies' employees and leaders will be a competitive advantage for the combined company," he said in a statement. "Together with the people of Baker Hughes, we will establish a team to develop a detailed and thoughtful integration plan to make the post-closing transition as seamless, efficient and productive as possible."

Baker Hughes Chairman and Chief Executive Officer Martin Craighead said last week he was advising shareholders against the deal after Halliburton said it would replace the entire board with its own directors.

Halliburton under the terms of the deal buys all outstanding shares in Baker Hughes for $34.6 billion.

Craighead said Monday the acquisition brings "significant premium" to Baker's shareholder and offers the existing ranks to own a "meaningful share" of a larger, more competitive oil services company.

"We envision a combined company capable of achieving opportunities that neither company would have realized as well, or as quickly, on its own, all while creating exciting new opportunities for employees," he said.

Companies working in the exploration and production sector of the oil industry are struggling as oil prices continue to fall. Global prices have shed about 20 percent of their value and reached a point where most major oil companies are trimming their investment forecasts.

Zacks downgraded Baker Hughes stock after the company's third quarter earnings were viewed as underperforming.

Lesar will stay on as CEO of the combined entity.

Shares of Halliburton were off more than 4 percent in pre-market trading. Baker Hughes (NYSE: BHI) shares were up more than 7 percent early Monday.