Australia flags concerns on $35 bln Halliburton bid for Baker Hughes

(Adds global context)

MELBOURNE, Oct 23 (Reuters) - Australia's antitrust regulator raised concerns on Friday about Halliburton Co's proposed $35 billion buyout of rival Baker Hughes Inc , in another setback for a deal that has already hit competition snarls in the United States.

Delaying its final ruling for a third time, the Australian Competition and Consumer Commision (ACCC) said joining the world's No. 2 and No. 3 oilfield services firms to eclipse the current No. 1, Schlumberger NV, "may create conditions that would facilitate coordinated behaviour in the market".

"The ACCC is concerned that the acquisition would result in the merged entity being one of only a small number of suppliers that could service the relevant markets," ACCC Chairman Rod Sims said in a statement, which described the companies as "close competitors across a broad range of oilfield goods and services in Australia".

"The ACCC is particularly concerned in relation to the supply of complex or high-risk projects, such as off-shore drilling projects," Sims added.

The regulator will give a final ruling on Dec. 17, but the remarks signal the hurdles the companies face as they try to push through a deal first announced 11 months ago as a way to cut costs amid an oil price downturn.

The two firms have already committed to selling businesses to appease U.S. authorities, but the ACCC's Sims noted that authorities in Europe, India and China are also looking at the deal.

The deal originally had a deadline of Dec. 16, but the two companies, which both provide services, technology and systems to the oil and gas industry globally, have more recently said it may not close until 2016.

The ACCC initially said it expected to give a decision by July 9 but postponed that twice to collect extra information from both companies. The regulator said it has requested more information by a deadline of Nov. 12.

The ACCC on Thursday also postponed a final decision on Royal Dutch Shell's $70 billion takeover of BG Group by a week, its second delay for a ruling on that deal, amid a flurry of M&A activity in the global energy sector that ias increased its workload.

(Reporting by Byron Kaye, Sonali Paul and Lincoln Feast; Editing by Richard Pullin)

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