GE HAS reached agreement to merge its oil and gas unit with Baker Hughes, to create a world-leading oilfield technology provider.
Baker Hughes’s current shareholders will each receive a dividend of US$17.50/share from GE, and will own 37.5% of the merged company, which will retain the Baker Hughes name. GE will own the remaining 62.5%. The deal, which was first rumoured on 27 October by the Wall Street Journal, has been unanimously approved by both companies’ boards of directors. The merged company has a combined revenue of US$32bn, and a presence in 120 countries.
The merger combines GE’s expertise in oil and gas technology, manufacturing and digital platforms with Baker Hughes oilfield equipment, technology and services expertise. The companies say that following the merger, they will be able to provide best-in-class physical and digital technology solutions for customers, covering drilling, completions, production, and midstream and downstream equipment and services.
“This transaction creates an industry leader, one that is ideally positioned to grow in any market. Oil & gas customers demand more productive solutions. This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes,” said Jeff Immelt, GE chairman and CEO, adding: “As we go forward, this transaction accelerates our capability to extend the digital framework to the oil and gas industry. An oilfield service platform is essential to deliver digitally enabled offerings to our customers.”
Martin Craighead, chairman and CEO of Baker Hughes, added that the combination of the two companies’ assets will enable the new Baker Hughes to deliver optimised and integrated solutions to customers.
The deal is expected to be complete by mid-2017.
Catch up on the latest news, views and jobs from The Chemical Engineer. Below are the four latest issues. View a wider selection of the archive from within the Magazine section of this site.