While it wasn’t exactly breaking news, with consensus having long ago decided that Halliburton and Baker Hughes would ultimately call off their ill-timed $28 billion merger announced in late 2014 following recurring media leaks, last night the two companies officially ended speculation when they announced that the contested merger would be called off, resulting in a $3.5 billion termination fee payable to Baker Hughes. With its immediate future somewhat in limbo, moments ago Baker Hughes outlined its “path for the future.”
It included the following key steps:
- “To reduce costs by simplifying its organization and rationalizing its operational footprint”: i.e. more layoffs
- “Commercial strategy focused on its core strengths in product innovation, while building broader channels for its technology and products” – i.e. returning to its core business model
- “Announces plans to buy back $1.5 billion of shares and $1 billion of debt with $3.5 billion merger breakup fee” – i.e. preventing any further selloff by promising to step in and buy its own securities.
Baker Hughes will provide more details on its plans when Chairman and CEO Martin Craighead and Senior Vice President and Chief Financial Officer Kimberly Ross host a webcast later today, Tuesday 3 May at 07:00 Central Time (08:00 Eastern Time).
To access the webcast, go to their Events and Presentations page on the Company’s website at: www.bakerhughes.com/investor.