"The ACCC's preliminary view is that the proposed acquisition is likely to raise competition concerns in a number of markets for the supply of oilfield goods and services," ACCC Chairman Rod Sims said this morning as the commission released a Statement of Issues on the merger.
Noting that Halliburton and Baker Hughes were close competitors across a broad range of oilfield goods and services in Australia, and in many countries around the world, Sims said the ACCC was concerned the acquisition would result in the merged entity being "one of only a small number of suppliers that could service the relevant markets".
"The ACCC is particularly concerned in relation to the supply of complex or high-risk projects, such as off-shore drilling projects," he said.
"The ACCC is concerned that the merger parties are two of the ‘Big Three' global oilfield services providers. These businesses have significant competitive advantages in providing services as they benefit from extensive product ranges, economies of scale and scope, large R&D budgets and significant industry experience.
"The ACCC also considers that the proposed acquisition may create conditions that would facilitate coordinated behaviour in the market."
The merger parties are the second and third largest oilfield services providers, both globally and in Australia. The fourth largest service provider, Weatherford, has a smaller share of supply and offers a narrower range of goods and services than Halliburton or Baker Hughes.
The ACCC has invited further submissions from the market in response to the Statement of Issues by November 12. As a result, the ACCC's final decision will be deferred until December 17.
The proposed acquisition is also being considered by competition authorities in a number of jurisdictions, including the US, the European Union, India and China.
Halliburton and BH announced last month that they were selling yet more business units to secure support from US antitrust regulators for their merger.
These include Halliburton's well completion and production business, two BH pressure pumping vessels in the Gulf of Mexico and its offshore cementing business in Australia, Brazil, the GoM and the North Sea - all of which would reduce the combined company's annual income by a further $US5 billion a year.
Halliburton said, when it first announced the proposed merger last November, that it might need to divest some $8 billion in assets.
