A merger between Halliburton and Baker Hughes is proposed that could generate $2 billion in cost synergies. The deal has been approved by both companies' boards, and if completed, would combine the companies' operations and expertise. The merger is expected to increase the new company's operating margin from 15% to 20% and earnings per share by 85% through $3 billion in combined synergies and efficiencies from expanded operations in North America. Completion of the deal is pending finalization of details and is scheduled to close in June next year.

1. HALLIBUTRON + BAKER
HUGHES
JOHN JELLINEK

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. 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. 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. 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. 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.