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Halliburton and Baker Hughes

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Halliburton and Baker Hughes

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John Jellinek outlines the proposed Halliburton and Baker Hughes deal that could reap signifiactn benefits for both companies.

John Jellinek outlines the proposed Halliburton and Baker Hughes deal that could reap signifiactn benefits for both companies.

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Halliburton and Baker Hughes

  1. 1. HALLIBUTRON + BAKER HUGHES JOHN JELLINEK
  2. 2. A MATCH MADE IN HEAVEN? A DEAL HAS BEEN PROPOSED BETWEEN TWO OIL GIANTS THAT SHOW BENEFITS ACROSS THE BOARD, FOR BOTH COMPANIES
  3. 3. COST SAVINGS GALORE • $2 billion worth of cost synergies will be the largest immediate factor pending a merger. $800 million worth of expansion in the recent North American operation areas should create a 20% margin for growth. Both companies’ boards have approve the deal with a $3.5 billion breakup fee should it fall through. With the current state of the oil market the $2 billion dollar cost savings will greatly help the competitive edge of the new company.
  4. 4. NEW LANDS • Combining both the cost synergies and the expansion combinations the new company will look at around a $1.5 billion operation efficiency surplus within North America. This spells great forecasting futures for Halliburton who historically holds a margin of 15%. Their earnings per share in 2013 was $2.36. Once all of these combinations become active, the operating margin should bump up to 20% with a EPS 85% above last years mark, at $4.35. These numbers are based on a 2017 mark for realization.
  5. 5. NEW LANDS CONTINUED • Overall with the valuation of the North American expansion combinations, the synergies between the merging companies would be near $3 billion dollars, a number enough to open eyes regarding the deal. The two, once competitors will combine as early as June of next year pending the details of the deal go through.
  6. 6. MORE ON ACQUISITIONS AND MERGERS • The world of mergers and acquisitions is a volatile and exciting one. To be able to look into two companies and speculate the future of the combination is something that entices many investors and companies. To see more about mergers and acquisitions visit johnjellinek.info where John Jellinek covers many business deals along with this site.

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