Baker Hughes To Buy Back $1.5 Billion In Stock, Cut Costs After Halliburton Merger Fails

Baker Hughes Inc. said it would use the $3.5 billion break up fee it will receive from Halliburton Co. after their merger was scrapped to buy back $1.5 billion worth of its stock and repay $1 billion in debt. The stock fell 1.6% in premarket trade Monday, but pared earlier losses of as much as 3.7%. The oil services company also plans to refinance its $2.5 billion credit facility expiring in 2016. The company will also implement a cost-cutting plan aimed at $500 million in savings by the end of 2016. "More than ever, our customers need to lower their costs and maximize production," said Baker Hughes' Chief Executive Martin Craighead. "We intend to build on our strong foundation and market position by simplifying the structure of our business and evolving our commercial strategy to deliver significant value to shareholders." The stock has climbed 4.8% year to date through Friday, while the S&P 500 has gained 1.1%.