Halliburton To Buy Baker Hughes And Strengthen Its Oilfield Services Portfolio

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In what is said to be one of the largest takeovers of a U.S. energy company in recent years, Halliburton, the world’s second largest provider of oilfield services is said to takeover third ranked, Baker Hughes. This move by Halliburton to takeover Baker Hughes will likely strengthen its oilfield services portfolio. Read on to understand the significance of this takeover.

Move To Boost Production In Aging Wells

Baker Hughes has the expertise and technology to boost production in old oil wells, something which Halliburton lacked. This asset will now be utilized by Halliburton to consolidate its position in the oilfield services market. The oil tools business which was also considered to be a prized possession of Baker Hughes will soon become a part of Halliburton’s offering.

David Wethe reported in a recent article:

“With Baker Hughes, Halliburton fills a gap in its portfolio of oilfield services: technology to boost production in aging wells. Halliburton also gets Baker Hughes’ prized oil tools business.”

Drop In Oil Prices Could Lead To More Such Acquisitions

The dramatic plunge of crude oil prices could threaten many more oilfield services companies and lead to more mergers and acquisitions. The low oil prices can make companies vulnerable as they struggle to survive and be profitable. It allows companies who are financially strong to take advantage of the situation and grab hold of the weaker companies at bargain prices.

Brooke Sutherland said in a recent article:

“Buyers with cash to spend aren’t going to let the cheapest valuations in years pass them by and targets threatened by lower prices may become more willing sellers.”

This development in the U.S. energy market is going to catapult the position of the two top companies allowing them to dominate the onshore fracking market. What remains to be seen is how they are going to synergize and pose a threat to Schlumberger.

The takeover of Baker Hughes by Halliburton is one of the largest takeovers in U.S. energy history. .