GE has announced the completion of the previously announced combination of GE’s oil and gas business with Baker Hughes.
Baker Hughes, a GE company is the first and only company to bring together industry-leading equipment, services and digital solutions across the entire spectrum of oil and gas development.
BHGE provides differentiated services for customers 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. No other company bringstogether capabilities across the full value chain of oil and gas activities—from upstream to midstream to downstream.
Baker Hughes with the oil and gas division of industrial giant GE closed on Monday morning, will creats the second largest oil field services firm in the world and Africa could be a big beneficiary.
Lorenzo Simonelli , the former chief executive of GE Oil & Gas and new chief of Baker Hughes, a GE company, said the combination will join Baker Hughes’ oil field expertise with GE’s industrial computing power and “transform” the industry.
The new company, he said, will have the capacity to expand into all parts of the oil and gas business, from the wellhead to the pipeline to the refinery — and even into power generation.
“So, what does Baker Hughes means to GE, Simonelli said in an interview with the Chronicle in US. “It really helps to complete the full integration of what we’ve done, full-stream.”
This fullstream portfolio positions BHGE to create new sources of value, improving productivity and project economics through integrated equipment and service offerings.
Jeff Immelt, Chairman and CEO of GE and Chairman of BHGE, said, “BHGE is an industry leader positioned to deliver in any economic environment and assist our customers in driving productivity. This deal capitalizes 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, which was previously announced on October 31, 2016, the transaction resulted in a partnership structure, pursuant to which Baker Hughes was converted to a partnership and GE contributed its Oil & Gas business into that partnership.
GE has a 62.5% interest in this partnership and legacy Baker Hughes shareholders have 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, are also entitled to receive a special one-time cash dividend of $17.50 per share (to be paid on July 6, 2017). $7.4 billion was contributed by GE to the new partnership, which will be used to fund the cash dividend to legacy Baker Hughes shareholders.
Baker Hughes, a GE company is dual headquartered in Houston, Texas and London, UK.