Baker Hughes 2014 Annual Report Download - page 41

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agreement. In addition, each of Baker Hughes and Halliburton must make certain filings with and obtain certain
other approvals and consents from various federal and state governmental and regulatory authorities.
Baker Hughes and Halliburton have not yet obtained the regulatory clearances, consents and approvals
required to complete the merger. Governmental or regulatory agencies could seek to block or challenge the merger
or could impose restrictions they deem necessary or desirable in the public interest as a condition to approving the
merger. Baker Hughes and Halliburton will be unable to complete the merger until the waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 have expired or been terminated and approvals are received
from the European Commission and various other governmental authorities. Regulatory authorities may impose
certain requirements or obligations as conditions for their approval. The merger agreement may require Baker
Hughes and/or Halliburton to accept conditions from these regulators that could adversely impact the combined
company. If the required regulatory clearances are not received, or they are not received on terms that satisfy the
conditions set forth in the merger agreement, then neither Baker Hughes nor Halliburton will be obligated to
complete the merger.
Additionally, even after the statutory waiting period under the antitrust laws and even after completion of the
merger, governmental authorities could seek to block or challenge the merger as they deem necessary or desirable
in the public interest. In addition, in some jurisdictions, a competitor, customer or other third party could initiate a
private action under the antitrust laws challenging or seeking to enjoin the merger, before or after it is completed.
Baker Hughes or Halliburton may not prevail and may incur significant costs in defending or settling any action
under the antitrust laws.
Pending litigation against Baker Hughes and Halliburton could result in an injunction preventing the consummation
of the merger or may adversely affect our business, financial condition or results of operations.
Following the announcement of the merger, various lawsuits have been filed against Baker Hughes, the
members of the Baker Hughes Board of Directors and Halliburton, alleging breaches of various fiduciary duties by
the members of the Baker Hughes Board of Directors during the merger negotiations and by entering into the
merger agreement and approving the merger and alleging that Baker Hughes aided and abetted such alleged
breaches of fiduciary duties. Among other remedies, the plaintiffs seek to enjoin the merger and rescind the merger
agreement, in addition to certain unspecified damages and reimbursement of costs. While we believe these suits
are without merit and intend to vigorously defend against such claims, the outcome of any such litigation is
inherently uncertain. The defense, outcome or settlement of any lawsuit or claim may adversely affect our
business, financial condition or results of operation.
Failure to complete our merger with Halliburton could negatively affect our stock price and our future business and
financial results.
If our merger with Halliburton is not completed, our ongoing business may be adversely affected and will be
subject to several risks, including the following:
• the attention of our management may have been diverted to the merger instead of on our operations and
pursuit of other opportunities that may have been beneficial to us;
• resulting negative customer perception could adversely affect our ability to compete for, or to win, new and
renewal business in the marketplace;
• having to pay certain significant costs relating to the merger without receiving the benefits of the merger,
including in certain circumstances a termination fee of $1 billion to Halliburton; and
• the trading price of Baker Hughes common stock may decline to the extent that the current trading price
reflects a market assumption that the merger will be completed.
Following our merger with Halliburton, the combined company may encounter difficulties in integrating the
businesses of Baker Hughes and Halliburton and realizing the anticipated benefits of the merger.
The merger involves the combination of two companies that currently operate as independent public
companies. The combined company will be required to devote management attention and resources to integrating
its business practices and operations, and prior to the merger, management attention and resources will be required