Halliburton Co. (NYSE: HAL) remains confident its supersized merger will go forward, but the heart of the matter may be whether it will make money when it does.

Halliburton said it’s working to close its $35 billion merger with Baker Hughes Inc. (NYSE: BHI) by its Dec. 16 closing date. First, though, the Houston company needs approval from several governments and antitrust clearance as well.

The company plans to divest assets generating $7.5 billion in revenues to obtain antitrust approval.

However, many challenges await Halliburton. The company’s divestitures may fetch lower than expected valuations. Integration may be more challenging than expected. And the company will simultaneously look for cost savings.

Company executives warn that approval of the deal could be pushed into 2016.

“We remain confident this deal will be approved,” said Dave Lesar, chairman and CEO of Halliburton, during a call with investors on Oct. 19. “We continue to target a 2015 close but the transaction could move into 2016 which is allowed under the merger agreement.”

Halliburton is in the middle of the first round of asset sales it is divesting to clear antitrust hurdles related to the merger. The assets, many world-class oilfield services coveted by the industry, include three of its drilling businesses.

The company is currently negotiating with the top two to three winners for the assets, said James Schumm, an executive director and senior analyst in the oilfield services sector at Oppenheimer & Co. Inc.

In late September, Halliburton and Baker Hughes added more businesses to the proposed asset sales to satisfy the U.S. antitrust division of the U.S. Department of Justice (DOJ).

A Bloomberg report quoted an unnamed source saying lawyers for the DOJ are concerned the oilfield service industry would become too concentrated after the merger.

Halliburton has added its expandable liner hangers business to the pile of assets it plans to sell.

Baker Hughes is also divesting its core completions business, its sand control business in the Gulf of Mexico (GoM) and its offshore cementing businesses in Australia, Brazil, the GoM, Norway and the U.K.

By the end of the third quarter, Halliburton still hadn’t begun marketing its second tranche of assets.

Outside of the U.S. the merger continues to make progress with completing required filings and obtaining the necessary approvals, Lesar said.

Halliburton expects to submit its filing to the European Commission (EU) in the “near future,” which will start the formal review process, he added.

Information concerning the company’s dealings with the EU is becoming “increasingly difficult to obtain,” Schumm said.

“A phase II investigation gives authorities another 90 days to review,” he said in an Oct. 20 report. “More than 90% of cases are resolved in phase I.”

Halliburton has said about $2 billion in cost savings is still achievable by eliminating redundant fixed costs and improving profitability after marrying overlapping product lines. That amount will be on top of any cost reductions that the company has made to date, Lesar said.

Through Oct. 21, Halliburton has reduced its global headcount by 14,000 employees—about 16% of its peak workforce of 80,000.

The combination with Baker Hughes and Halliburton will create a global oilfield services company that will “deliver an unsurpassed depth and breadth of cost-effective solutions to our customers,” he said.

Bill Herbert, managing director and co-head of securities at Simmons & Co. International, doesn’t expect the combination to be accretive until 2018.

Should the merger be consummated, Halliburton’s financial performance could be weaker than expected, said J. David Anderson, senior equity analyst with Barclays Capital Inc.

The risks of integrating two leviathan companies while trying to find billions in cost savings through synergies may proof tough, Anderson said in an Oct. 20 report.

And, as with other companies, Halliburton will face continued global upstream spending weakness into 2016 and beyond.

The merger still stands to firmly establish Halliburton as the low cost North American service provider and the company should emerge from the downturn with a greater share of North America business.

“Our downside scenario assumes a breakup of HAL's acquisition of BHI and weak financial performance due to related adverse effects on HAL's operations and/or relationships with key customers and suppliers during the pendency of transaction,” Anderson said.

During the third quarter, the timing agreement with the DOJ was also extended by three weeks. At the earliest, the DOJ’s review will close on Dec. 15—from the original date of Nov. 25—or 30 days after the date on which the two companies fully comply with the antitrust requests.

The megamerger was originally announced Nov. 17, 2014.

Halliburton faces a $3.5 billion fee if the transaction terminates due to a failure to obtain required antitrust approvals.

Contact the author, Emily Moser, at emoser@hartenergy.com.