DOJ sues to block Halliburton, Baker Hughes oil merger

DOJ sues to block Halliburton, Baker Hughes oil merger
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The Department of Justice filed a lawsuit Wednesday to block Halliburton, the world’s largest oil-field service company, from acquiring Baker Hughes, the industry’s third-largest provider.

The agency claims in the lawsuit filed in U.S. District Court in Delaware that the acquisition, valued at $34 billion, would eliminate head-to-head competition, raise prices and reduce innovation in the oilfield services industry. 

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“The proposed deal between Halliburton and Baker Hughes would eliminate vital competition, skew energy markets and harm American consumers,” Attorney General Loretta Lynch said in a statement. “Our action makes clear that the Justice Department is committed to vigorously enforcing our antitrust laws. In the days ahead, we will continue to stand up for fair deals and free markets, and for the American people we are privileged to serve.”

Though Halliburton proposed to sell a mix of assets from both companies as a remedy, the Justice Department said Halliburton would hold onto important facilities, employees, contracts, intellectual property, and research and development resources, putting the buyer of those assets at a competitive disadvantage. 

Justice claims the divesture would fail to replicate the substantial competition between the two rival companies that exists today.