Baker Hughes, GE reach milestone in merger transaction

By Patrick C. Miller | June 19, 2017

Baker Hughes Inc. and General Electric Co. have reached an agreement with the U.S. Department of Justice that allows the two companies to complete their proposed merger.

Last fall, GE announced its plans to acquire Baker Hughes, a Houston-based company that provides oilfield services, products and technology worldwide. The transaction is expected to be completed by the middle of this year.

A Baker Hughes news release said the milestone “represents significant progress toward creating an oil and gas productivity leader positioned to deliver value for customers, employees and shareholders.”

Under a proposed consent decree filed in U.S. District Court in Washington, D.C., GE agreed to divest its GE Water & Process Technologies business after closing the Baker Hughes transaction. GE announced in March that it had agreed to sell GE Water to Suez for $3.4 billion.

The companies also recently received clearance from the European Commission to complete the transaction without conditions. Baker Hughes has scheduled a shareholders’ vote for June 30.

The agreement combines GE Oil & Gas and Baker Hughes to create an oilfield technology company with a mix of service and equipment capabilities in more than 120 countries and with a combined revenue of $32 billion.

Terms of the agreement—which were last year unanimously approved by the boards of directors of both companies—stipulated that when the transaction closes, Baker Hughes shareholders will receive a special one-time cash dividend of $17.50 per share and 37.5 percent of the new company. GE will own 62.5 percent of the company.