Halliburton (HAL) said Monday it will acquire rival Baker Hughes (BHI) for $34.6 billion in a deal with huge implications for an industry pressured by plunging oil prices.
The merger will allow the oilfield services company to take on market leader Schlumberger NV.
Over the years, including as recently as this summer, there have been massive restructuring plans and acquisitions by oil companies seeking an advantage in the energy industry. Here’s a roundup of some of the biggest transactions, according to Bloomberg data.
Kinder Morgan (2014)
Kinder Morgan (KMI) underwent a $70 billion reorganization in August, buying out its sprawling assets and consolidating into a single entity. Those transactions amounted to the second largest energy deal in history, according to information compiled by Bloomberg. Kinder’s objective was to consolidate its assets, creating a $44 billion energy giant. The combined company took on around $27 billion in debt held by individual partnerships, according to a Fortune story about the announcement.
“In the opportunity-rich environment of today’s energy infrastructure sector, we believe this transaction gives us the ability to grow KMI for years to come,” said CEO Richard Kinder in a statement.
ChevronTexaco (2000) and Socal-Gulf (1984)
At the turn of the century, Chevron (CVX) and Texaco merged, creating what’s currently the second largest U.S. energy company (it trails ExxonMobil on the Fortune 500). The deal was valued at $45 billion, bringing into existence a new company with a market capitalization of $97 billion. “Our goal is to be No. 1 in total stockholder return among our industry competitors. With this merger, two companies with a long history of partnership will join together to create greater value for our stockholders and put us on the path to our goal,” said CEO Dave O’Reilly at the time.
Before Chevron became Chevron, however, the company was known as Standard Oil Co. of California, or Socal. The company made history in 1984 by merging with Gulf, the fifth-largest petroleum company in the U.S., in what was the biggest corporate merger at the time, according to the company’s website. After Socal made a $13.3 billion bid and won, the new corporation changed its name to Chevron.
ExxonMobil (1998)
In the largest energy transaction in history, Exxon merged with Mobil in 1998 in a deal worth $81 billion. Antitrust issues held up the deal for nearly a year, and the two companies ultimately sold a total of over 2,400 stations across the U.S. to appease the Federal Trade Commission, according to an FTC statement released at the time.
FTC chairman Robert Pitofsky explained the thinking behind the required restructuring at the time: “Because Exxon and Mobil are such large and powerful competitors, and because they now compete in several product and geographic markets in the United States, the commission insisted on extensive restructuring before accepting a proposed settlement,” he said in a statement. “This settlement should preserve competition and protect consumers from inappropriate and anticompetitive price increases.”
The impetus for the ExxonMobil (XOM) merger, like with the Halliburton and Baker Hughes deal, was due to falling oil prices. “This merger will enhance our ability to be an effective global competitor in a volatile world economy and in an industry that is more and more competitive, ” said Lee Raymond and Lucio Noto, chairmen and chief executive officers of Exxon and Mobil, respectively, in a joint statement on the company’s website.
