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GE Oil & Gas and Baker Hughes merger complete

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LNG Industry,

GE has announced that its oil and gas business has successfully combined with Baker Hughes.

Baker Hughes, a GE company (BHGE) provides differentiated services by combining digital solutions and technology from the GE Store with the domain expertise of Baker Hughes and its culture of innovation in the oilfield services sector. GE claims that the company brings capabilities across the full value chain of oil and gas activities, from upstream to downstream. The company adds that this fullstream portfolio positions BHGE to create new sources of value, improving productivity and project economics through integrated equipment and service offerings.

The Chairman and CEO of GE and Chairman of BHGE, Jeff Immelt, said: “BHGE is an industry leader positioned to deliver in any economic environment and assist our customers in driving productivity. This deal capitalises on the current cycle in oil and gas while also strengthening our position for the market recovery. I am extremely proud of the GE and Baker Hughes teams for completing the combination in just eight months, which is a testament to the team’s unwavering focus and dedication since the announcement last October. As we go forward, the new fullstream offering accelerates our ability to extend a digital framework to customers while delivering world-class technical innovation and service execution. We look forward to continuing a seamless integration for our customers.”

Under the terms of the transaction agreement (previously announced on 31 October 2016), the transaction resulted in a partnership structure, pursuant to which Baker Hughes was converted into a partnership and GE contributed its Oil & Gas business into that partnership. GE holds a 62.5% interest in this partnership, and legacy Baker Hughes shareholders hold a 37.5% interest through their ownership of BHGE. Former Baker Hughes shareholders, whose shares converted into shares of Class A common stock of BHGE in the transaction, also hold the right to receive a special one-time cash dividend US$17.50 per share (to be paid on 6 July 2017). GE contributed US$7.4 billion to the new partnership. This will be used to fund the cash dividend to legacy Baker Hughes shareholders.

BHGE is dual-headquartered in London, UK, and Houston, US.

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