Per Bloomberg: Halliburton and Baker Hughes deal is OFF

3.5 billion termination fee....ouch.

Why are those fees always set so high? It's nuts that they owe that much in cash and the other company didn't do anything

3.5 Billion termination fee on top of the millions upon millions paid the last 18 months trying to close the deal. Embarrassing.

I didn't suggest they did.

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Why are those fees always set so high?

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Often used by companies to get free money when they know the deal will sour or it won't be approved.

It's not necessarily a "market share" issue, more of a company valuation issue. Baker Hughes took a ~30% hit in stock value since this started as opposed to Halliburton at half that (15%). This has left Baker de-valued big time. It may very well put Halliburton in the same position in the near future, but from the start, this leaves Baker weaker.

Only saving grace for Hal may be that people view it as cutting their losses and that losing 3.5B is better than taking on a company paying 78 bucks a share when it's now only worth 46. But it still is a very bad situation. I think Baker and Hal are both going to be getting some new CEO's in the next few months. What a waste of money for both companies at such a difficult time for the industry.

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That's the terms of a non-disclosure agreement. You grant another firm to look under your skirt and learn virtually everything about your business. You're due something if they look that hard, know that much about you, then go back to being a competitor.

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This.

Hopefully for those companies it's a quick process. I just see it taking a little time to find someone new, etc. I'm sending my resume to both letting them know I'm available.

Did they really think creating a duopoly between Schlumberger and Halliburton wouldn't raise some eyebrows in the Antitrust circle?

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Did they really think creating a duopoly between Schlumberger and Halliburton wouldn't raise some eyebrows in the Antitrust circle?

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Well sure, but it isn't exactly fair to say Halliburton cannot be as big as Schlumberger just because they got big first. Assuming that was a hurdle for the deal, it sucks the DOJ penalized Halliburton because of Schlumberger.