Halliburton Would Get Advantage Over Rival With Merger: UBS

A merger between oil-services companies Halliburton Co. and Baker Hughes Inc. would give Halliburton a much needed leg up against larger rival Schlumberger Ltd. , analysts at UBS said in a note late Thursday. One "distinct advantage" of Schlumberger is its global scale, which leads to higher margins due to greater cost absorption and efficiencies. "Over the long-run a (Halliburton/Baker Hughes) merger could provide (Halliburton) a significant advantage in gaining global share, expanding margins and competing against Schlumberger," the analysts said. Digesting an acquisition of that size, however, could take two years or more and could be a distraction to Halliburton, the analysts said. The "two companies are very different and it would take time to become a unified company," they said.The Wall Street Journal reported Thursday Halliburton was in talks to buy Baker Hughes, and such talks are moving quickly.