Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Last Hour:
Last 24 Hours:

GE, Baker Hughes Merge Oil & Gas Businesses

Monday, October 31, 2016 4:17
% of readers think this story is Fact. Add your two cents.

general-electric-ge-logoGeneral Electric Company (NYSE:GE) and Baker Hughes Incorporated (NYSE:BHI) will combine their oil and gas operations into a single massive oilfield services firm, the two companies said today.

The transaction, which is expected to close by the middle of 2017, entails Baker Hughes shareholders receiving a special one-time cash dividend of $17.50 per share and 37.5% of the new company. Meanwhile, GE will retain 62.5% ownership of the newly-formed company, will be executed using a partnership structure.

GE Oil & Gas and Baker Hughes will each contribute their respective operating assets, and GE will put $7.4 billion into the deal, which will then be paid as the aforementioned cash dividend to existing Baker Hughes shareholders.

The “New” Baker Hughes promises to be a unique equipment, technology and services provider with some $32 billion in combined annual revenue.

The two companies commented via press release:

“This transaction creates an industry leader, one that is ideally positioned to grow in any market. Oil & gas customers demand more productive solutions. This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes,” said Jeff Immelt, Chairman and Chief Executive Officer of GE. “As we built the GE Oil & Gas business, I have always been impressed by the respect our customers have for Baker Hughes. GE Oil & Gas is a key GE business, one that fully leverages the GE Store. As we go forward, this transaction accelerates our capability to extend the digital framework to the oil and gas industry. An oilfield service platform is essential to deliver digitally enabled offerings to our customers. We expect Predix to become an industry standard and synonymous with improved customer outcomes. GE investors will benefit through ownership of a stronger business with substantial synergies and an improved competitive position. The transaction is expected to add approximately $.04 to GE EPS in 2018, $.08 by 2020.”

GE shares rose $0.17 (+0.58%) to $29.39 in premarket trading Monday. Prior to today’s merger announcement, GE had fallen 6.2% year-to-date.


Meanwhile, Baker Hughes shares surged $7.38 (+12.48%) to $66.50 in premarket trading. Prior to today’s news, BHI had already jumped 28.1% year-to-date amid a partial recovery in the oil and gas industry.


You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (


We encourage you to Share our Reports, Analyses, Breaking News and Videos. Simply Click your Favorite Social Media Button and Share.

Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories



Top Global

Top Alternative




Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.