Halliburton will have to go through a distinguished group of veterans in the energy industry first if it wants to replace the board of directors of Baker Hughes.
Halliburton, the world's second biggest oilfield services provider approached Baker Hughes, the world's third several weeks ago and is now wanting to nominate its own director for the combined company at a meeting scheduled April next year, as confirmed by Baker Hughes.
Halliburton will have to be like a camel through the eye of a needle as it faces Houston-based Baker Hughes board of directors led by the former heads of Marathon Oil Corp., the executive chairman of Devon Energy Corp. and executives of Sunoco Inc.
Combined, the company's 11 board members were once again reappointed after winning a re-election in April with almost 94 percent support of votes cast by shareholders.
Majority of Baker Hughes' board members have an average age of 66.1, slightly older than the boards of other big companies, according to proxy adviser Institutional Shareholder Services.
Baker Hughes will have to recruit new candidates for its board in April as three of its current members, including the lead independent director will have reached the company's mandatory retirement age of 72 coming next year's election.
It is in this note that Halliburton is trying to push its own boards in the combined companies. However, the two companies reportedly have talked about it before and Halliburton had refused to agree not to poach its employees before they reached a deal.
Earlier this year, Baker Hughes proposed two measures to issue 30 million shares to compensate executives and other employees, in part to motivate and retain them. A compensation consultant hired by the company estimated it would dilute existing shareholders by 4.7%.
Meanwhile the two companies combined would dominate the $25 billion U.S. onshore fracking market with a whopping 39 percent market share, more than double the size of its next competitor and world's number one oilfield services provider, Schlumberger, according to Spears & Associates.
