A key guide to Baker Hughes and Halliburton

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Baker Hughes’ operations and geographic reach

Before going into the details of the acquisition transaction, let’s get a sense of the business and assets of Halliburton (HAL) and Baker Hughes (BHI) to see why these two parties came together to strike a deal.Combined Map

BHI mainly provides services, products, and technologies to upstream energy companies. BHI also provides industrial products and services to the downstream chemicals and midstream energy companies. As of December 31, 2013, the company operated in more than 80 countries.

BHI’s operations are structured through four geographic segments and one business segment:

  1. North America
  2. Latin America
  3. Europe, Africa, and Russia Caspian
  4. Middle East and Asia Pacific

Also, the company’s industrial services segment is the fifth business segment.

Based on the oil and natural gas well construction phases, BHI’s operations fall into one of two categories:

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  • Drilling and evaluation: This category includes products and services like drill bits, drilling services, wireline services, and drilling and completion fluids.
  • Completion and production: This category includes completion systems, wellbore intervention, intelligent product systems, artificial lift, upstream chemicals, and pressure pumping.

An essential overview of Halliburton Company

Halliburton (HAL) is a Texas-based energy, oil, and gas equipment and service provider. It provides services related to exploration, development, and production of oil and natural gas to companies around the world. Halliburton has two major divisions:

  • Completion and production: This division includes production enhancement, cementing, completion tools, Halliburton Boots & Coots, multi-chem, and Halliburton artificial lift products.
  • Drilling and evaluation: This division consists of baroid, sperry drilling, wireline and perforating, drill bits and services, landmark software and services, testing and subsea, and consulting and project management.

Geographically, Halliburton’s operations are organized into four primary locations:

  1. North America
  2. Latin America
  3. Europe, Africa, CIS
  4. Middle East, Asia

Read more about Halliburton in Market Realist’s article, “A key guide to Halliburton’s 3Q14 earnings.”

If the transaction goes through, the combined entity of Baker Hughes and Halliburton will become one of the largest oilfield service companies in the US. However, Schlumberger (SLB), with current market capitalization of ~$123 billion, will continue to lead the chart. Weatherford International (WFT) is another OFS major with ~$13 billion market capitalization. All these companies are components of the VanEck Vectors Oil Services ETF (OIH).

Did shareholders of both the companies respond to the news of the acquisition the same way? Read the following section to find out.

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