NEW YORK — In a deal that shows just how quickly falling prices can upend the energy industry, Halliburton is buying rival oilfield services company Baker Hughes for cash and stock worth $34.6 billion.
Global oil prices have tumbled 31 percent over the past five months to levels not seen in four years. That has forced the industry to cut costs by delaying or scaling back drilling — which means less work for Halliburton and Baker Hughes, companies that manage oil and gas fields for energy companies.
Even when prices were high, oil and gas companies had begun to slow capital spending and new drilling as rising costs cut into profit margins. Energy companies now have even less to spend.
Halliburton chairman and CEO Dave Lesar said Monday that the combined company will be able to reduce costs by $2 billion a year.
The oil plunge also lowered the price tag on Baker Hughes. Its shares slumped 32 percent — from $75 to $51 — between late June and Thursday, when the companies said a deal was being discussed. The drop reduced Baker Hughes’ market capitalization by $10.4 billion.
Halliburton will pay $78.62 per share of Baker Hughes Inc. Baker Hughes shareholders will receive 1.12 Halliburton shares plus $19 in cash for each share they own.
