GE completes acquisition of Baker Hughes for $7.4bn
US-based energy conglomerate General Electric (GE) has completed the merger of its oil and gas business with Baker Hughes as part of a deal valued at $7.4bn.
The transaction will see GE assume 62.5% interest in the new entity known as ‘Baker Hughes, a GE company’ (BHGE), while the remaining 37.5% is set to be owned by Baker Hughes shareholders.
BHGE intends to bring together digital solutions and technology from the GE Store marketplace with Baker Hughes' domain knowledge in the oilfield services sector.
Baker Hughes will now offer industry-leading equipment, services and digital solutions across the entire spectrum of oil and gas development following the completion of the merger.
GE chairman and CEO and BHGE chairman Jeff Immelt said: “This deal capitalises on the current cycle in oil and gas while also strengthening our position for the market recovery.
“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.”
The partnership was formed in accordance with the deal signed in October, with GE also contributing its oil and gas business to the new initiative.
BHGE combines capabilities from across the full value chain of oil and gas activities, including upstream, midstream and downstream.
GE reached an agreement with the US Department of Justice (DoJ) to carry out the merger last month.
The DoJ noted that the new oilfield service company formed by the parties will have combined revenue of $32bn.
GE will be required to divest its Water & Process Technologies business, GE Water, in order to comply with the agreed arrangement with the DoJ.
GE Water previously agreed to be acquired by French waste and water group Suez for $3.4bn in March.
Image: Bakers Hughes’ SHADOW Frac Plugs. Photo: courtesy of Baker Hughes Incorporated.