Baker Hughes to Buy Back Stock, Debt After Halliburton Deal Fails
May 2 (Reuters) - Baker Hughes Inc said it planned to buy back $1.5 billion of shares and $1 billion of debt, using the breakup fee it will receive following the collapse of its proposed buyout by fellow oilfield services provider Halliburton Inc.
The merger, valued at $35 billion when it was first announced in November 2014, would have created North America's largest oilfield services company to take on global market leader Schlumberger Ltd.
Baker Hughes will get $3.5 billion as part of the merger agreement, which the companies terminated on Sunday after opposition from U.S. and European antitrust regulators.
The U.S. Justice Department filed a lawsuit last month to stop the deal, arguing that it would leave only two dominant oilfield services companies.
Baker Hughes, which is focusing on the development of products that lower costs and maximize production for oil and gas producers, also said on Monday it planned to refinance a $2.5 billion credit facility, which expires in September 2016.
The company said an initial phase of cost-cutting was expected to result in $500 million of annualized savings by the end of 2016.
In a separate regulatory filing on Monday, Baker Hughes said it cut 2,000 more jobs in the first quarter, adding to the 18,000 cut worldwide last year. The company had about 43,000 employees as of Dec. 31.
Baker Hughes said last Wednesday it recorded "merger-retained" costs of $110 million, after tax, in the first quarter, leading to a bigger net loss for the period.
The Houston-based company also said then that it was limiting its exposure to the unprofitable onshore pressure pumping business in North America.
Halliburton, which will release its results on Tuesday, said on April 22 that revenue in the quarter slumped 40.4 percent.
Baker Hughes's shares were down about 1.6 percent at $47.60 in premarket trading.
The company's shares have fallen 25 percent since Halliburton first agreed to buy Baker Hughes in November 2014. Halliburton's shares have fallen more than 19 percent in the same period.
(Reporting by Amrutha Gayathri in Bengaluru; Editing by Shounak Dasgupta)
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