UPDATE: Shareholders Clear Baker Hughes To Buy BJ Services

Baker Hughes Inc.'s (BHI) purchase of fellow energy-services company BJ Services Co. (BJS) was approved Wednesday by the companies' shareholders after the U.S. Department of Justice cleared the $6.6 billion deal.

Final approval by shareholders had been delayed after the Justice Department raised concerns about the overlap of some Gulf of Mexico businesses owned by the companies. As a result, Baker Hughes will divest itself of two vessels and other assets used to aid in the production of hydrocarbons in the U.S. Gulf. The company said that it doesn't expect the sales will be material to the financial performance of the combined company.

The deal, announced last summer, is expected to close in early April. It will add a pressure-pumping business to Baker Hughes's array of services. Pumping fluids at high pressure is essential for coaxing natural gas out of deeply buried shale-rock formations. Producing gas from shale is a booming area of the U.S. energy industry, and has boosted domestic output and helped push gas prices down sharply.

"Pressure pumping was a prominent gap in Baker's portfolio," said Bill Herbert, an analyst with the Houston-based energy investment bank Simmons & Co. Without the acquisition Baker Hughes would be "marginalized on a global basis," he said.

The deal will also allow the combined company to bundle its services and compete more effectively for big oilfield-services contracts against rival providers Schlumberger Ltd. (SLB) and Halliburton Co. (HAL) both in the U.S. and abroad.

However, the company still faces the challenge of integration--a key obstacle to any large acquisition.

Baker Hughes in January reported higher-than-expected fourth-quarter earnings as oil and gas activity picked up from the prior quarter, though profit still tumbled 81% owing to weak demand. Meanwhile, BJ Services last month said it swung to an unexpected fiscal first-quarter loss as revenue and margins declined.

Baker Hughes's shares were recently up 1.9% at $46.84, while BJ Services added 2.3% to $21.42.

-By Jason Womack, Dow Jones Newswires; 713-547-9201; jason.womack@dowjones.com

(Jodi Xu contributed to this report.)

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