The Justice Department has filed a motion to block the proposed merger of Halliburton and Baker Hughes.
The agency says the merger of two of the three largest providers of oilfield services in the world would hurt the US economy and global competition.
“The proposed deal between Halliburton and Baker Hughes would eliminate vital competition, skew energy markets and harm American consumers,” Attorney General Loretta E. Lynch said in a statement to reporters on Wednesday.
Lynch, in a conference call, said the deal “puts competition at risk in too many markets.” The combined companies make up 90% of the US market in terms of sales.
Schlumberger, Halliburton and Baker Hughes make up the “Big Three” providers of the services and products needed to evaluate, drill, and extract oil and gas reserves.
“These possess unrivaled product portfolios, research and innovation capabilities, and the scope and scale necessary to address the most difficult challenges facing the oil and gas industry they serve,” the complaint says.
The two companies operating in 80 countries and earn nearly $40 billion in combined annual revenue. The two companies combine to employ more than 100,000 workers.
Attorney General Bill Baer of the Antitrust Division said the lawsuit should come as no surprise.
Halliburton and Baker Hughes have announced that they will vigorously contest the Justice Department’s efforts to block the propose merger.
The companies say the Justice Department “has reached the wrong conclusion in its assessment of the transaction and that its action is counterproductive, especially int he context of the challenges the U.S. and global energy industry are facing.”