Halliburton Company (NYSE:HAL) reported that it hired Bank of America Corp (NYSE:BAC) and Deutsche Bank AG (USA)(NYSE:DB) for asset sales. The two banks will help the company in the sale of two businesses. The assets are valued around $5 billion collectively.
Following its $35 billion merger deal with Baker Hughes Incorporated (NYSE:BHI) in last November, the company outlines some of its oilfield services businesses it intends to divest to reduce regulators’ antitrust concerns. Credit Suisse Group AG (ADR)(NYSE:CS) will acts as the global coordinator for all of the asset sales and will play an important role in each auction. The group advised the company on its merger deal with Baker in November 2014.
Sperry drilling business
Halliburton has directed Bank of America to sell parts of its Sperry Drilling business. It is the same asset that offers onshore and offshore petrophysical engineering and drilling services globally. These assets comprise directional drilling, measuring-while-drilling, and logging-while-drilling. The Sperry Drilling Business offered for sale generates approximately $3 billion in annual revenues, and expects to get same value in the sale process.
Drill bits business
Halliburton informed that Deutsche Bank will be working to sell its drill bits business, including the fixed cutter bits and roller cone bits. These assets are valued in between $1.5 billion and $2 billion. There are several Halliburton’s clients who have postponed or halted drilling projects in the last few months. The move came as a result of declining oil prices. The prices of oil are expected to have an impact on the value of the assets for sale.
The possible divestitures
Halliburton has been in talks with federal antitrust regulators pertaining to other possible divestitures. The last merger deal with Baker Hughes will result in a large oilfield service company to compete with market leader Schlumberger Limited. (NYSE:SLB) as customers sharply reduce spending in a crude oil downturn.