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One province is taking a novel approach to ending Chinese overcapacity, using prizes to discourage overproduction and pollution in steel and coal. Haliburton and Baker Hughes have decided to call their $28 billion merger off.
Sichuan Province Tries Prizes to Halt Overcapacity
China’s southwestern Sichuan province has allocated 2 billion yuan ($308.87 million) in prize money for companies that reduce their overcapacity in industries including coal and steel, state media reported on Tuesday.
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The funding will be given to local governments and Sichuanese companies that are shifting away from energy-intensive, high-polluting, unsafe industries that do not comply with government policies aimed at dealing with overcapacity, the Sichuan Daily, the official newspaper of the provincial government, reported.
Baker Hughes, Haliburton Scrap Merger
Oilfield services provider Halliburton Co. and smaller rival Baker Hughes Inc. announced the termination of their $28 billion merger deal on Sunday after opposition from U.S. and European antitrust regulators.
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The tie-up would have brought together the world’s No. 2 and No. 3 oil services companies, raising concerns it would result in higher prices in the sector. It is the latest example of a large merger deal failing to make it to the finish line because of antitrust hurdles.