What: December was a rocky month for Halliburton (NYSE:HAL), with conflicting reports surrounding its pending merger with Baker Hughes (NYSE:BHI) seemingly being printed on a daily basis. That uncertainty, combined with more oil prices weakness, sent the stock down by double digits last month. 

So what: Investors were initially enthusiastic that the deal was nearing the finish line. Reports had surfaced earlier last month that GE (NYSE:GE) was in advanced talks to buy some of the assets that Halliburton and Baker Hughes needed to divest in order to win regulatory approval. Analysts thought that GE's entry would enhance the chances of the deal going through.

Unfortunately, U.S. regulators weren't convinced that the deal wouldn't result in the top of the oil-field service industry being too concentrated. Furthermore, regulators in the EU were also concerned. The main sticking point is that there is a big gap after the current top three oil-field service companies that wouldn't likely be filled if a company like GE acquired these assets.

This delay forced Baker Hughes and Halliburton to agree to extend the merger deadline until the end of April. That will give the pair more time to prepare further proposals for regulators to review.

Now what: Investors are starting to worry that there is a very real possibility that this deal won't be approved by regulators. While that wouldn't be the end of the world for either company, it would be a serious blow to the credibility of both management teams. Having said that, prior to agreeing to an extension, Halliburton was clear that it wouldn't extend the deal timeline unless it had a very good sense of what it would take to get this deal approved. So, given that the company agreed to an extension, it would suggest that it believes that it can indeed offer the right combination of divestitures needed to win regulatory approval.

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