HALLIBUTRON + BAKER HUGHESJOHN JELLINEK

A MATCH MADE IN HEAVEN?A DEAL HAS BEEN PROPOSED BETWEEN TWO OIL GIANTS THAT SHOW BENEFITS ACROSS THE BOARD, FOR BOTH COMPANIES

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.

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.

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.

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.