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GE Oil & Gas-Baker Hughes merger creates oilfield services giant

by Indrajit Sen on Jul 9, 2017


With headquarters in both London and Houston, the combined company will have roughly $23bn in annual revenue.
With headquarters in both London and Houston, the combined company will have roughly $23bn in annual revenue.

GE Oil & Gas, the oil and gas equipment and services division of American industrial technology behemoth General Electric Co (GE), last week announced completing its acquisition of rival Baker Hughes Inc.

The merger is estimated to have created the world's second-largest oilfield services provider by revenue. The new company, to be called ‘Baker Hughes, a GE company’, has begun trading on the New York Stock Exchange since last week under the stock ticker ‘BHGE’.

‘The new company is the first and only to bring together industry-leading equipment, services and digital solutions across the entire spectrum of oil and gas development’, according to a media statement issued by the merged entity.

With headquarters in both London and Houston, the combined company will have roughly $23bn in annual revenue and offer oilfield gear including blowout preventers, pumps, drilling, chemicals, other products and services for oil producers in about 120 countries.

For Baker Hughes, the deal helps it grow in size and become an even-more important player in the industry after antitrust concerns scuttled a tie-up last year with rival Halliburton.

The GE Oil & Gas deal vaults the merged business past Halliburton to rival only Schlumberger for dominance in the global oilfield service market.

For GE, the deal will help it focus more on the oil and gas sector, especially in North America, while shielding the parent company's earnings from the energy industry's boom and bust cycles.

All of GE's oil and gas-related businesses will be folded into the new company, which will be 62.5% owned by GE. Baker shareholders will own the rest and receive a one-time, $17.50 dividend.

The integration of the Russian businesses will be completed upon receipt of Russian regulatory approval, according to the statement received by arabianoilandgas.com.

The combined organisation will command a global workforce of about 70,000 and offer a ‘fullstream’ portfolio that is focussed on four key oil and gas verticals — oilfield services, oilfield equipment, turbomachinery and process solutions, and digital solutions — apart from 24 other product lines and segments.

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