The Australian Competition and Consumer Commission has released a Statement of Issues on the proposed acquisition by Halliburton Company (Halliburton) of Baker Hughes Incorporated (Baker Hughes).
“The ACCC’s preliminary view is that the proposed acquisition is likely to raise competition concerns in a number of markets for the supply of oilfield goods and services,” ACCC Chairman Rod Sims said.
Halliburton and Baker Hughes are close competitors across a broad range of oilfield goods and services in Australia, and in many countries around the world.
“The ACCC is concerned that the acquisition would result in the merged entity being one of only a small number of suppliers that could service the relevant markets. The ACCC is particularly concerned in relation to the supply of complex or high-risk projects, such as off-shore drilling projects,” Mr Sims said.
“The ACCC is concerned that the merger parties are two of the ‘big 3’ global oilfield services providers. These businesses have significant competitive advantages in providing services as they benefit from extensive product ranges, economies of scale and scope, large R&D budgets and significant industry experience.
“The ACCC also considers that the proposed acquisition may create conditions that would facilitate coordinated behaviour in the market,” Mr Sims said.
The merger parties are the second and third largest oilfield services providers, both globally and in Australia. The fourth largest service provider, Weatherford, has a smaller share of supply and offers a narrower range of goods and services than Halliburton or Baker Hughes.
The ACCC is inviting further submissions from the market in response to the Statement of Issues by 12 November 2015. As a result, the ACCC’s final decision will be deferred until 17 December 2015.
The proposed acquisition is also being considered by competition authorities in a number of jurisdictions, including the US, the European Union, India and China.
Further information on the ACCC’s merger review is available at the ACCC's Public Register.