The Justice Department has sued to stop Houston-based Halliburton from acquiring crosstown competitor Baker Hughes.
The deal would combine two of the world's three leading oilfield service providers. It would create a bigger rival to Schlumberger Limited, though Schlumberger would remain the industry leader.
University of Houston Professor Ed Hirs said they’re a little late.
“They let these two companies get to be as large as they are, so combined they will control huge chunks of the oil service market,” Hirs said. “Where have they been the last dozen years while these companies have been acquiring other rivals?”
Justice Department officials say in their lawsuit that the Halliburton-Baker Hughes deal threatens to raise prices and eliminate competition.
The suit was filed in federal court in Delaware, where both companies are incorporated.
Halliburton and Baker Hughes announced their plan to combine in November 2014, shortly after oil prices began to fall. The Justice Department says the deal was valued at $34 billion.
The companies issued a joint statement on Wednesday stating that they “intend to vigorously contest the DOJ’s effort to block their pending merger.”
