The pending $35 billion merger between services firms Halliburton and Baker Hughes failed to win approval on Tuesday from the U.S. Justice Department.
The deal’s timing agreement with the Antitrust Division of the DOJ expired without a settlement and without the agency filing litigation to block the deal.
The DOJ has informed the companies that it is not satisfied that their current plans for proposed divestments address the agency’s anti-trust concerns.
The agency will continue to assess further proposals but has not commented on the matter yet.
“The companies intend to continue their discussions with the DOJ, and remain focused on completing the transaction as early as possible in 2016, but there is no guarantee that an agreement with the DOJ or other competition authorities will be reached,” Halliburton said.
Houston-based Halliburton said that both companies “strongly believe” that the divestiture package they have proposed is “more than sufficient to address concerns raised by competition authorities, including the DOJ.”
The companies are also working to resolve any remaining issues with the European Commission and all other competition enforcement authorities that have expressed an interest in the transaction.
Halliburton refiled a request with EU anti-trust regulators earlier this month seeking approval for the merger.
When the deal was announced last year, Halliburton said it was prepared to divest from businesses that generate annual combined revenues of $7.5 billion, although it expected regulators to require “significantly less” divestment.
The companies put several other businesses on the sale block earlier this year with a combined 2013 revenue of about $5.2 billion.
The pending acquisition has received regulatory clearances in Canada, Colombia, Ecuador, Kazakhstan, South Africa, and Turkey.
The deal was initially slated to close late in the second half of 2015, but the regulatory hurdles have pushed back the closing date.
Halliburton and Baker Hughes agreed on Tuesday to extend the time period for closing the transaction to no later than April 30, 2016, as permitted under the merger agreement.