Halliburton and Baker Hughes abandon $34.6bn takeover

US oil services companies Halliburton and Baker Hughes have called off their proposed merger after resistance from regulators in the US and Europe.

The deal, announced in 2014, would have seen a $34.6bn takeover by Halliburton of Baker Hughes, creating a powerful rival to global leader Schlumberger.

Halliburton and Baker Hughes are the second and third biggest oil services companies.

That raised concerns about higher prices and reduced competition.

Baker Hughes stands to receive a $3.5bn break-up fee as a result of the deal falling through.

Failure to satisfy regulatory concerns was not the only reason for abandoning the merger.

The fall in the oil price since the proposal was announced changed the financial attractiveness of the cash and shares deal.

The US Department of Justice filed a lawsuit to stop the merger last month, arguing it would leave only two dominant suppliers in the well drilling and oil construction services industry.

The European Commission also expressed concerns that the deal might reduce competition and innovation.

Both companies have been hit by a fall in business as oil and gas giants rein back on projects and investments.

Last week, Baker Hughes reported a bigger-than-expected first-quarter loss. Last month, Halliburton announced 6,000 job cuts.