• 6 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes Saudis Pull Hyperloop Funding As Branson Temporarily Cuts Ties With The Kingdom
  • 6 mins WTI @ $75.75, headed for $64 - 67
  • 2 hours Trump vs. MbS
  • 3 hours Saudi-Kuwaiti Talks on Shared Oil Stall Over Chevron
  • 7 hours The Dirt on Clean Electric Cars
  • 13 hours Uber IPO Proposals Value Company at $120 Billion
  • 4 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 2 hours EU to Splash Billions on Battery Factories
  • 17 hours COLORADO FOCUS: Stocks to Watch Prior to Midterms
  • 14 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 8 hours Coal remains a major source of power in Europe.
  • 4 hours Poland signs 20-year deal on U.S. LNG supplies
  • 20 hours UN Report Suggests USD $240 Per Gallon Gasoline Tax to Fight Global Warming
  • 16 hours Nopec Sherman act legislation
Carbon Pricing Won't Kill Big Oil

Carbon Pricing Won't Kill Big Oil

Big oil has agreed to…

Global Economy Throwing Up Red Flags For Oil

Global Economy Throwing Up Red Flags For Oil

Investors are feeling increasingly gloomy…

Baker Hughes To Merge With GE Oil & Gas Business In $32B Group

Oil pipeline

GE (NYSE:GE) and Baker Hughes (NYSE:BHI) said on Monday they had agreed to merge GE’s oil and gas business with Baker Hughes to create an oil and gas industry technology and services provider worth US$32 billion in combined revenue.

Under the terms of the agreement, GE would hold 62.5 percent in the new company, while Baker Hughes shareholders would get 37.5 percent of the “new” company.

Existing Baker Hughes shareholders will also receive at the closing of the transaction a special one-time dividend of US$17.50 per share and GE will contribute US$7.4 billion to fund the payment of that dividend.

The transaction is expected to close in the middle of next year, and to generate synergies of US$1.6 billion by 2020. It is also seen as adding US$0.04 to GE’s earnings per share (EPS) by 2018, and US$0.08 by 2020.

In the structure of the new company, GE will have its chairman and CEO Jeff Immelt serve as chairman of the board of directors, and GE Oil & Gas president and CEO, Lorenzo Simonelli, will serve as president and CEO. Baker Hughes chairman and CEO Martin Craighead will serve as vice chairman of the board.

The deal needs to be approved by Baker Hughes shareholders and by regulators in order to go through.

According to Bloomberg, the merger would create the world’s second-biggest oilfield services group after Schlumberger (NYSE:SLB). Baker Hughes, currently sitting pretty as the world’s number 3 oilfield services group, would overtake Halliburton Company (NYSE:HAL) in terms of sales.

It was with Halliburton that Baker Hughes had tried to merge as the crude price downturn had hit hard the oilfield services sector. Earlier this year, however, Halliburton and Baker Hughes called off the planned deal, saying they were unable to overcome federal antitrust regulators.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


x

Join the discussion | Back to homepage

Leave a comment
  • Bob on October 31 2016 said:
    This merger is a tricky one. A major service provider with a major equipment maker. I don't know how many substantial equipment makers are out there but if I was a small to medium sized service firm, this merger might make me uncomfortable about equipment access.

    If HAL and SLB feel likewise, I'd guess we might see some industry pushback.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News