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Federal suit to stop Halliburton, Baker Hughes deal
FILE - In a Nov. 18, 2014 file photo, Halliburton Chairman, President and CEO David Lesar, third from right, rings the New York Stock Exchange opening bell. Halliburton and Baker Hughes announced their plan to combine in November 2014, shortly after oil prices began to fall. The U.S. Justice Department is expected to sue to stop Halliburton Co. from acquiring rival Baker Hughes Inc., according to a person familiar with the matter. The person spoke on condition of anonymity Tuesday, April 5, 2016, because the lawsuit had not yet been announced. (AP Photo/Richard Drew, File)

Federal suit to stop Halliburton, Baker Hughes deal

WASHINGTON (AP) — The Justice Department on Wednesday sued to stop Halliburton Co. from acquiring oilfield services rival Baker Hughes Inc., saying the deal would harm consumers and eliminate head-to-head competition.

The proposed transaction, valued at nearly $35 billion, would combine two of the world’s three leading providers of those services to oil and gas companies and create a bigger rival to the industry leader, Schlumberger Ltd.

But the Justice Department warned in its complaint that consolidation of the “Big Three” would lead to higher prices and weaken innovation in an industry that fiercely competes for the business of exploration and production companies and to develop technologies for deeper drilling.

“The U.S. economy, American consumers, and those who engage in the production of energy consumed in the United States cannot be asked to accept the risk to competition posed by this transaction,” the department said in its complaint.

Halliburton and Baker Hughes announced their plan to combine in November 2014, shortly after oil prices began to fall. Few, however, predicted the depth and duration of lower prices caused by a global oversupply of oil.

The glut has slowed demand for drilling services and crushed the stock price of both companies.

In related news, Layoffs to hit 10K in Shell-BG Group merger.

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