Amid pressure from both U.S. and European antitrust regulators, two of the world's biggest oilfield services companies, Halliburton and Baker Hughes, have called off their $28 billion merger. In April, the Justice Department sued to stop the merger saying it would have eliminated competition, NPR's Jim Zarroli reports for our Newscast unit.
The companies perform various services in the oil production process, including managing geological data, drilling evaluation, well construction, as well as transporting and processing the oil, according to the companies' websites. The DOJ said the deal would have left just two dominant entities in this business: the newly formed company, and Schlumberger, which is the world's largest oil services company.
Halliburton has to pay $3.5 billion due to failure of the deal. Also at Marketplace, The New York Times , Bloomberg, Reuters.
(Score: 2) by J.J. Dane on Tuesday May 03 2016, @06:02PM
Are these really people you want to mess with?
(Score: 2, Interesting) by Anonymous Coward on Tuesday May 03 2016, @08:17PM
In that case, they'll die a hero. Oligopolies usually suck and kill competition. The "economies of scale" argument is overused and exaggerated by them. Medium-sized firms can specialize just fine, and even create de-facto standards in the process as each specialty becomes a field in itself.
For example, if for the sake of argument the US car companies were split into say 25 companies, some may start to specialize such that some focus on just engines, others on just the passenger compartment, others on bodies and outer style, etc. This would allow each to shop around for different specialists and result in de-facto standards where the parts can be either swapped out, or more easily cross-adapted by the firms involved so that they can switch suppliers as they shop for better deals. This creates more competition.
(Score: 2, Insightful) by khallow on Tuesday May 03 2016, @09:08PM
(Score: 2) by Wootery on Wednesday May 04 2016, @07:32PM
You could equivalently have put I'm more spineless than the regulators.
(Score: 4, Interesting) by Alfred on Tuesday May 03 2016, @06:05PM
Nope. No tears shed for them.
Really though, Haliburton doesn't need to be any bigger. They need the ma bell treatment more than most companies.
(Score: 2) by Kilo110 on Tuesday May 03 2016, @06:16PM
"They need the ma bell treatment more than most companies."
I'm not sure if regulators have the backbone and independence to pull that off these days.
It's still astonishing to me that happened.
(Score: 3, Insightful) by fishybell on Tuesday May 03 2016, @06:22PM
The Ma Bell treatment moved us from national monopolies to regional monopolies. Anyone who has cable internet in the USA can tell you how competitive regional monopolies are.
(Score: 0) by Anonymous Coward on Tuesday May 03 2016, @06:28PM
For a brief period I had my choice of phone companies and long distance providers. Then they all merged back into huge conglomerates.
I will not be surprised to read someday AT&T merger with Verizon completes regulatory hurdles. At that point we are back where we started.
(Score: 0) by Anonymous Coward on Tuesday May 03 2016, @06:39PM
Errr?
At least for phone, you have the option of AT&T, whoever is your cable provider, and 3 or 4 wireless. Most of it dirt cheap.
Internet however...
(Score: 3, Informative) by bob_super on Tuesday May 03 2016, @07:20PM
Dirt cheap?
THIS is dirt cheap actual-market-forces-at-work: http://mobile.free.fr/ [mobile.free.fr]
(Score: 5, Interesting) by ikanreed on Tuesday May 03 2016, @06:48PM
Honestly, regulators have stopped more mergers in the past 4 years(yeah, not Obama's whole term) than the 2 decades prior.
Here's why: some economic papers came out that suggested than when mergers that were on the edge of being rejected went through, the markets in question had long-lasting price increases, and those that were rejected on the edge didn't.
So that's the most unbelievable thing: a government organization changing its practices based on evidence. It's nuts.
(Score: 2) by VLM on Tuesday May 03 2016, @07:18PM
the markets in question had long-lasting price increases
In the modern era, all mergers involve large price increases.
(Score: 2) by bob_super on Tuesday May 03 2016, @07:23PM
> a government organization changing its practices based on evidence
You could have noticed a change between "anything the market wants goes, zero rejections in two terms" Bush/Cheney and the current evil-socialist-regulating-commie living in the White House.
> It's nuts
That some people do still get a lot of votes? Indeed.
(Score: 2) by ikanreed on Tuesday May 03 2016, @08:03PM
But it wasn't actually Obama taking office that made the change. That's one of the things I pointed out. Clinton also didn't do a lot of anti-trust, US v. microsoft being a notable exception.
(Score: 2, Interesting) by Anonymous Coward on Tuesday May 03 2016, @08:39PM
Clinton's kow-towing to conservative orthodoxy doesn't say anything about Obama's policies 8+ years later. Clinton had to lean really far right in order to take the presidency away from the republicans because conservatives had the dominant social narrative at the time. Obama did not have to do any such thing because the economic collapse under Bush 2 made much of that ideology toxic (and it has only become more toxic since he was elected). After all, Obama won a nobel prize for the simple act of not being George W Bush.
(Score: 2) by LoRdTAW on Tuesday May 03 2016, @07:48PM
Plenty of large corps merge all the time and somehow slip through the cracks. Example: Edwards Vacuum and Leybold Vacuum are both being acquired by Atlas Copco. To add to that, Atlas Copco are also buying the largest vacuum pump re-builder and service center in the USA. The EU approved the acquisitions. Never mind the fact that Leybold alone is bigger than every other vacuum maker combined. Edwards is about twice as big as Leybold.
Was talking to our local vacuum shop owner and he cant even replace a single sensor in a new GSX dry pump because it's proprietary. It's a little thing held on by one little screw and two wires. Edwards told him to either ship the 1500 lb pump to Arizona (from New York) or fly in a tech. This was a pump for IBM btw.
Funny, isn't it.
(Score: 0) by Anonymous Coward on Wednesday May 04 2016, @02:11AM
even better, seized by it's workers
(Score: 4, Interesting) by Flyingmoose on Tuesday May 03 2016, @06:09PM
In the ass. With a big stick. With lots of thorns.
(Score: 1, Interesting) by Anonymous Coward on Tuesday May 03 2016, @08:24PM
no, both ends
(Score: 4, Funny) by Anonymous Coward on Tuesday May 03 2016, @06:57PM
Will soon get an invite for a quail hunting trip with Dick Cheney.
(Score: 0) by Anonymous Coward on Tuesday May 03 2016, @07:27PM
More like an IED in their garage which will be reported as "ISIS TARGETING SUBURBAN HOMES!" Will have the dual benefit of recuperating some of that $3.5B cost too!