Halliburton CEO David J. Lesar

U.S. Department of Justice officials have reportedly voiced concerns that the pending merger between service giants Halliburton and Baker Hughes could raise antitrust issues.

An unnamed source told Bloomberg that DOJ lawyers reviewing the $34.6 billion merger are concerned it will stifle competition.

The source said government officials aren’t sold on the idea that Halliburton’s divestment plan will sufficiently restore competition.

The DOJ has not made a final decision on the merger.

Last week, the DOJ extended its review of the deal to November 25, 2015, or to 90 days after both companies have certified substantial compliance with a second request for information from the agency.

The two companies said they expect to certify substantial compliance with the DOJ’s second request within a month.

The Houston-based companies also agreed to extend the timetable for closing the acquisition to no later than December 1, 2015.

When the deal was announced last year in November, Halliburton said it is prepared to divest from businesses that generate annual combined revenues of $7.5 billion, although it expects regulators to require “significantly less” divestment.

In Halliburton’s second quarter results, chairman and CEO Dave Lesar said the company has received initial bids for the assets.

“We recently received the initial round of bids on our previously announced divestitures, and are pleased with the prices and level of interest. Baker Hughes has certified compliance with the U.S. Department of Justice’s second request, and we expect to do so shortly,” Lesar said.

Halliburton hasn’t disclosed further details about the bids.

It agreed to pay Baker Hughes a $3.5 billion fee if the transaction fails to win regulatory approval.

The deal is expected to make the newly merged firm more competitive with services market leader Schlumberger.

The combined companies had a pro-forma 2013 revenue of $51.8 billion, topping Schlumberger’s $45.3 billion.

Halliburton expects the merger to save it nearly $2 billion per year.


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