GE Oil & Gas/Baker Hughes merger

Overview:

• On August 31 2016, GE and Baker Hughes announced plans to merge Baker Hughes with GE’s oil and gas business.
• GE Oil & Gas and Baker Hughes would combine their operating assets in a newly formed partnership structure. It would be 62.5% owned by GE and 37.5% owned by existing Baker Hughes shareholders through a newly NYSE listed corporation.
• There would be a cash dividend of $17.50 per share for Baker Hughes shareholders at closing, funded by the $7.4 billion GE would give to the new partnership.
• Baker Hughes Incorporated would delist following the transaction and the combined company would trade as Baker Hughes, a GE company. 
• The newly-created equipment, technology and services conglomerate would operate across more than 120 countries generating $32 billion of combined revenue. It would have dual headquarters in Houston, Texas and London, UK. Five directors would be appointed by GE and four by Baker Hughes.
• NYSE-listed GE specialised in machines and solutions driven by software designed to have connectivity, responsive and predictive capabilities. Knowledge transfer was central to its business, using its “GE Store” to share expertise and apply innovation across different industry sectors. As part of this, GE Oil and Gas innovated in oil and gas technology.
• Baker Hughes’ 34,000 employees across over eighty countries supplied oilfield products, services, systems and technology to assist in the extraction and processing of hydrocarbon resources.
• Merging GE’s technological know-how and Baker Hughes’ oilfield services operations would allow the new company to offer physical and digital productivity technology, moving beyond oilfield services and into oil and gas productivity solutions.
• The terms of the agreement had been unanimously approved by the boards of directors of both companies and the transaction was expected to close in mid-2017.
• From March to June 2017, the transaction was working its way through the regulatory clearance procedures of the United States Department of Justice (DOJ) and European Commission. On 12th June 2017, the parties announced that in order to gain DOJ clearance, GE had agreed to divest GE Water & Process Technologies after the Baker Hughes merger completed.
• The completion of the transaction was announced on July 3 2017. Integration of the Russian businesses was still pending regulatory approval at that date.
• Centerview Partners and Morgan Stanley acted as financial advisers to GE.
• Goldman Sachs acted as financial adviser to Baker Hughes.

Jordan Hughes - Journalist