Transaction Details: 

GE and Baker Hughes announced that the companies have entered into an agreement to combine GE’s oil and gas business and Baker Hughes

The “New” Baker Hughes will have $32 billion of combined revenue and operations in more than 120 countries.

GE will own 62.5% of the company. The transaction is expected to close in mid 2017.

 Competitive landscape

Compelling Strategic and Financial Benefits of the Transaction

The product portfolio of GE Oil & Gas and Baker Hughes in drilling, completions, production and midstream / downstream equipment and services will create the second largest player in the oilfield equipment and services industry.

Will have operations in more than 120 countries.

GE’s portfolio includes: subsea & drilling, rotating equipment, imaging and sensing

Baker Hughes portfolio includes: Drilling & Evaluation, Completion & Production

Cost Cuts

Merger Structure

The transaction will be executed using a partnership structure, pursuant to which GE Oil & Gas and Baker Hughes will each contribute their operating assets to a newly formed partnership. GE will have a 62.5% interest in this partnership and existing Baker Hughes shareholders will have a 37.5% interest through a newly NYSE listed corporation. Baker Hughes shareholders will also receive a special one-time cash dividend of $17.50 per share at closing. The $7.4 billion contributed by GE to the new partnership will be used to fund the cash dividend to existing Baker Hughes shareholders.

Headquarters, Management and Board of Directors

The “New” Baker Hughes will have dual headquarters in Houston, Texas and London, UK.

Jeff Immelt, Chairman and CEO of GE will serve as Chairman of the Board of Directors and Lorenzo Simonelli, president and CEO of GE Oil & Gas will serve as President and Chief Executive Officer.

Martin Craighead, Baker Hughes Chairman and CEO, will serve as Vice Chairman of the Board. The remainder of the executive leadership team will be a combination of existing leaders from both GE and Baker Hughes.

Upon closing, the “New” Baker Hughes board will consist of nine directors: five of whom, including Chairman Jeff Immelt will be appointed by GE and four, including Vice Chairman Martin Craighead will be appointed by Baker Hughes.

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