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After months of regulatory delays the pending merger between Baker Hughes and Halliburton has collapsed.

In a statement issued on Sunday, Halliburton confirmed media reports that the merger agreement has been terminated.

“While both companies expected the proposed merger to result in compelling benefits to shareholders, customers and other stakeholders, challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action,” Halliburton chairman and CEO Dave Lesar said.

In connection with the termination of the merger agreement, Halliburton will pay Baker Hughes the termination fee of $3.5 billion by May 4.

“Today’s outcome is disappointing because of our strong belief in the vast potential of the business combination to deliver benefits for shareholders, customers and both companies’ employees,” Baker Hughes chairman and CEO Martin Craighead said.

The merger was valued at $35 billion when the deal was signed in November 2014 and was initially slated to close in the second half of 2015 before that deadline was extended to April 30.

The U.S. Department of Justice filed a civil antitrust lawsuit on April 6 to block the proposed merger between Halliburton and Baker Hughes.

The deal also faced opposition from European regulators who said they were concerned that the deal would harm competition.

Halliburton said it will discuss the termination during its previously scheduled conference call on May 3.

After the termination was announced, Baker Hughes outlined a plan to reduce costs and simplify its business.

Baker Hughes said its “taking immediate steps to remove significant costs that were retained in compliance with the former merger agreement,” with the initial phase of the cost reduction efforts is expected to result in $500 million of annualized savings by the end of 2016.

The Houston-based company also plans to use the proceeds from the breakup fee to buy back $1.5 billion worth of shares and debt totaling $1 billion.

Baker Hughes also intends to refinance its $2.5 billion credit facility that expires in September 2016.

The company said it has also decided to “retain a selective footprint in its U.S. onshore pressure pumping business, while preserving the flexibility to expand for the right opportunities.”

Halliburton confirmed Friday that it cut another 6,000 jobs during the first quarter, citing low oil prices and falling rig counts.