GE announced the completion of the merger between its oil and gas business with Baker Hughes, making the new entity among the largest services provider in the industry.
Baker Hughes, a GE company, (BHGE) the name of the new merged entity, will bring together industry-leading equipment, services and digital solutions across the entire spectrum of oil and gas development.
Jeff Immelt, chairman and CEO of GE and chairman of BHGE, said, “This deal capitalises 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.
With dual headquarters in Houston, Texas and London, UK, 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, GE said in a statement.
“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,” Immelt added.
Under the terms of the transaction agreement, which was previously announced on October 31, 2016, the transaction resulted in a partnership structure, whereby Baker Hughes was converted to a partnership and GE contributed its Oil & Gas business into that partnership.
GE has a 62.5 per cent interest in this partnership and legacy Baker Hughes shareholders have a 37.5 per cent 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).
GE contributed $7.4 billion to the new partnership, which will be used to fund the cash dividend to legacy Baker Hughes shareholders.