An in-depth investigation into the proposed takeover of an oilfield service supplier by its rival has been launched.
The European Commission said it will assess whether the purchase of Baker Hughes by Halliburton would impede effective competition.
Both the US firms supply a broad range of tools and services for drilling and evaluation as well as completion and production of oil and gas wells.
The Commission’s preliminary investigation found “serious potential competition concerns in more than 30 product and service lines”, both offshore and onshore.
The takeover would bring together the world’s second and third largest oilfield service suppliers, therefore eliminating one of the three current main global competitors, it added.
It is concerned a reduction of the number of competitors could reduce the incentive to innovate, “especially given that Halliburton and Baker Hughes currently compete fiercely with each other in developing new products”.
Commissioner Margrethe Vestager, in charge of competition policy, said: “The Commission has to look closely at this proposed takeover to make sure that it would not reduce choice or push up prices for oil and gas exploration and production services in the EU. Efficient exploration and production of oil and gas resources within the EU form an important element of our Energy Union strategy in terms of ensuring security of supply.”
The two companies said a “substantial remedies package” will be offered to address any competitive concerns. To date, the transaction has received regulatory clearances in Canada, Colombia, Ecuador, Kazakhstan, South Africa and Turkey.
The Commission has until 26th May to make a final decision.