The European Commission is concerned that the deal, which would join the world's second and third largest oil services businesses, may pose 'serious competition concerns' for more than 30 product and service lines offered by the two companies. Consolidation in the oil and gas exploration and drilling sector is a growing concern for regulators for the EU following the $14.3b takeover of Cameron International by market leader Schlumberger in August last year. With new players facing towering financial and technological barriers to entry into the sector, Schlumberger, Halliburton and Baker Hughes are the only real contenders for integrated service offerings. If Halliburton's proposed $26bn takeover of Baker Hughes goes ahead, the field will be whittled down to just two.
'Phase two'
Halliburton was originally given until 5 January to propose remedies to the European Commission's concerns about the tie-up, but the deadline elapsed without a proposal. Now launching 'phase two' of the European Commission's investigation into the deal, EU Comissioner for Competition Margrethe Vestager asserts that the probe into the proposed Halliburton/Baker Hughes tie-up was part of a broader EU agenda to ensure the security and sustainability of energy supply in Europe. The deal is also battling headwinds from antitrust officials in the US. However, both Halliburton and Baker Hughes have assured EU regulators that they will work 'constructively' to address competition concerns, developing a 'substantial remedies package' for any concerns that endure following the European Commission's scrutiny. The companies had set 30 April as the working deadline for completing the deal, but the EU probe may push this date back. The official deadline is 26 May. Sources: Financial Times; World Oil
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