Volume 2, Issue 2, May 2017, Page: 45-56
The Merger of Halliburton and Baker Hughes: A Risk Analysis
Evangelia Fragouli, Management & Marketing, Business School, University of Dundee, Dundee, UK
Kwaku Donkor, Management & Marketing, Business School, University of Dundee, Dundee, UK
Received: Sep. 12, 2016;       Accepted: Mar. 6, 2017;       Published: Mar. 21, 2017
DOI: 10.11648/j.ijafrm.20170202.11      View  1218      Downloads  72
Abstract
The aim of the present study is to explore the risks and benefits of mergers compared to those of strategic alliances and test the classic agency theory in relation to firm’s and shareholders interest. Using the case study methodology, the study examines the recent announced merger of Halliburton and Baker Hughes exploring the possible risks the merger itself may open up for the two firms, reviewing a possible alternative strategic alliance and the effects it may have. The paper applies a qualitative analysis based on empirical data of similar case studies projecting past experiences on future events. The study concludes that the merger was in the best interest of both companies, a merger though filled with the risk of specialisation within a shrinking market still poses the best rate of survival for firms in the gas and oil industry. The paper includes implications for strategic decision making and risk management policy in the oil & gas industry.
Keywords
Merger, Market, Strategic Alliance, Risk, Oil
To cite this article
Evangelia Fragouli, Kwaku Donkor, The Merger of Halliburton and Baker Hughes: A Risk Analysis, International Journal of Accounting, Finance and Risk Management. Vol. 2, No. 2, 2017, pp. 45-56. doi: 10.11648/j.ijafrm.20170202.11
Copyright
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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