The more things change, the more things stay the same. In 1986 Baker International Corp. and Hughes Tool Co. merged due to a depression in the industry. The market value of the merged company was $1.2 billion. Nearly 20 years later Halliburton is taking over Baker Hughes for $34.6 billion equity value during a downturn in the industry. My, how things have changed.

What have stayed the same are the Department of Justice’s requirements for the Hart-Scott Rodino Antitrust Improvements Act of 1976. When Baker and Hughes merged in the mid-1980s, Baker owned Reed Tool. In keeping with that act, Baker sold substantially all of its Reed Tool division to Camco Inc. to clear the way for the merger. After changing hands several times, Reed Hycalog bits are now offered by National Oilwell Varco (NOV).

For déjà vu all over again, Halliburton will separately market its fixed-cutter and roller-cone drillbits, directional drilling, and LWD/MWD businesses for the merger with Baker Hughes. That will allow Halliburton to own the Hughes bit brand and the rig count. From what I’ve heard on the street, NOV may step in and bid on the Halliburton bits. The merry-go-round has started again.

And, if you like really high-stakes poker, you can ante up like Shell did for BG Group―$70.1 billion. It is the latest in a long series of takeovers dating back to 1984, when Standard Oil of California (Chevron) bought Gulf Corp. for $13.4 billion. There were two major acquisitions in 1998―Exxon bought Mobil for $80 billion, and BP added Amoco for $48 billion. Chevron acquired Texaco in 2001 for $45 billion.

Shell’s acquisition of BG has been a subject of speculation for quite a few years. BG’s emphasis on natural gas development always seemed to be a great fit with Shell’s assets. Now the two companies will see how their synergies will work.

Shell’s liquefaction plants in operation or under construction include the largest floating LNG plant in the world on the Prelude Field, North West Shelf Venture and Gorgon LNG, Australia; Sakhalin 2, Russia; Qatargas 4, Qatar; Qalhat LNG and Oman LNG, Oman; Brunei LNG; Nigeria LNG; Malaysia LNG; Atlantic LNG, Trinidad and Tobago; and Peru LNG.

BG’s liquefaction interests include Egyptian LNG; Queensland Curtis LNG, Australia; and Atlantic LNG, Trinidad and Tobago. Both companies are involved in other LNG projects that are planned and proposed.

The biggest BG prizes might be its natural gas assets in Tanzania, where early exploration has discovered 425 Bcm (15 Tcf) of total gross resource, and its fields in Brazil. An LNG plant is proposed in Tanzania. There is a lot of exploration work left to do.

Instead of drilling and completion, there is a whole different kind of discovery underway in the merger and acquisition market.

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