HOUSTON (AP) — Oilfield-services provider Baker Hughes Inc. said Thursday it is talks with rival Halliburton Co. about a potential merger.
The company's brief statement late Thursday said there was no guarantee that a deal would be done and offered no further details.
It came after The Wall Street Journal reported that Halliburton was in talks to buy Baker Hughes. At the start of trading Thursday, Baker Hughes' stock market value was $22 billion.
Representatives from Halliburton declined to comment.
The deal talk between the two Houston-based companies comes during a drop in oil prices that has hurt both companies' stock price.
Halliburton, Baker Hughes and a third major competitor, Schlumberger Ltd., help energy companies find and extract oil and gas.
Combined, Halliburton and Baker Hughes would be slightly larger by revenue than Schlumberger, and hold an even larger advantage in North America, where hydraulic fracturing, or fracking, is a big business for the oilfield companies.
"They would be so dominant that you may even see some pushback" from regulators, Benjamin Schuman, an analyst with Drexel Hamilton LLC in New York, told The Associated Press. "Folks could be concerned. You could have one player with close to 40 percent market share if nothing is divested or shut down."
A combination could give Halliburton and Baker Hughes more power to charge energy companies higher prices, particularly in North America. But the effect on consumers would be minor because oilfield services are a relatively small part of overall energy prices, Schuman said.
Baker Hughes shares closed up 15 percent at $58.75. They added another 3 percent in extended trading after the company confirmed the deal talks. Halliburton gained 56 cents, or about 1 percent, to close at $53.79 and tacked on another 68 cents in after-hours trading.