Baker Hughes to use breakup fee to repurchase stock and cut debt

Baker Hughes Inc. sought to reassure investors on Monday by announcing a $2.5bn plan to buy back stock and pay down debt, using the breakup fee it will receive following the collapse of its long-stalled takeover by oilfield services provider Halliburton Inc.

Baker Hughes stated that proceeds from a $3.5bn breakup fee from Halliburton would fund its $1.5bn share buyback and repayment of $1bn of debt.

Baker Hughes also stated its plans to refinance it’s $2.5bn credit facility maturing in September 2016.

Separately, the company also announced a further 2,000 job cuts as part of its attempts to cut costs by $500m this year.

Source: Reuters

 

Halliburton and Baker Hughes call off $28bn deal

Oil giants Halliburton Co. and Baker Hughes Inc. terminated their $28bn merger deal amid regulatory pressures.

The companies had announced the deal in November 2014 to compete with no. 1 firm Schlumberger Ltd. The companies had set a deadline by end of April 2016, to either come up with an outcome or end the deal.

Baker Hughes would receive a termination fee of $3.5bn from Halliburton by 4 May 2016.

The U.S. Justice Department filed a lawsuit in early April to stop the merger, saying it threatened to eliminate head-to-head competition in 23 products and services used in oil exploration.

Source: Bloomberg