Halliburton Co.’s share price down, to acquire Baker Hughes Inc. in a cash-and-stock deal

The second-largest oilfield services provider in the world, Halliburton Co., reached an agreement to acquire Baker Hughes Inc., which is currently ranked third. The company is trying to take advantage of declining crude prices in order to organize the largest takeover deal in the U.S. energy sector since 2011.

The Chief Executive Officer of Halliburton, Dave Lesar said on a conference call today, cited by Bloomberg: “We have the best antitrust counsel available on this. We are absolutely confident that we’re gonna get this thing done.”

The companies made an official statement today that the shareholders of Baker Hughes will get 1.12 Halliburton shares plus $19 in cash for each of their shares in the company. This fixes the price of the deal at $78.62 per share. The offer of Halliburton represents a 31% premium to the closing price of Baker Hughes, which currently has an enterprise value of $38 billion.

As reported by the Wall Street Journal, Chief Executive Officer Lesar also added: “The stockholders of Baker Hughes will immediately receive a substantial premium and have the opportunity to participate in the significant upside potential of the combined company.”

The deal comes after a month of negotiations between the executives of the two companies. The transaction still needs to be approved by the regulatory authorities, but it may face some resistance from U.S.-based and other countries regulators.

The transaction is expected to be finalized in the second half of 2015. Upon its completion, the shareholders of Baker Hughes will hold a total of 36% of the combined company. After the merger is finalized, it will have a combined board of 15 members, including three from the current board of Baker Hughes.

Halliburton Co. was down 7.14% to trade at $51.15 per share as of 15:41 GMT, marking a one-year decrease of 9.05%. The company is valued at $46.68 billion. According to CNN Money, the 27 analysts offering 12-month price forecasts for Halliburton Co. have a median target of $70.00, with a high estimate of $94.00 and a low estimate of $60.00. The median estimate represents a +36.88% increase from the last price of $51.14.