The deal which will include stocks and cash, will make it the biggest merger in the sector since industry leader Schlumberger NV bought Smith International for $11 billion in 2010. The deal will see a company with a combined annual revenue of $51.8 billion more than Schlumberger's $45.3 billion according to FY 2013 reports but the combined market capitalization of the new entity will be lower than the market cap of Schlumberger valued at over $120 billion .
Halliburton has agreed to an offer of 1.12 Halliburton share and $19 in cash for for every Baker Hughes share and Baker Hughes share holders will own almost 36% of the new company.
According to Reuters, Halliburton said it will offload businesses that generate as much as $7.5 billion dollars to please regulators and see the deal sail through regulatory authorities smoothly. Halliburton has also agreed to pay Baker Hughes $3.1 billion dollars if the deal falls through.
The deal is coming at a time when oil prices are trading by a third of what they were selling in June of 2014.
Like their slogan goes Halliburton seems to be "Solving Challenges" by acquiring Baker Hughes.
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