Baker Hughes and GE finalize merger deal

By Patrick C. Miller | July 10, 2017

International oilfield services company Baker Hughes now officially calls itself a GE company following the completion of a merger transaction last week.

The transaction combining GE’s oil and gas business with Baker Hughes results in a new organization—BHGE—that GE says is the world’s first company to bring together equipment, services and digital solutions for the entire oil and gas industry. The combined companies employ 70,000 people and operate in more than 120 countries.

Lorenzo Simonelli, Baker Hughes president and CEO, said, “Disruptive change is the oil and gas industry’s new normal. We created BHGE because oil and gas customers need to withstand volatility, work smarter and bring energy to more people. Our offering is further differentiated from any other in the industry across the value stream and enables and assists our customers in driving productivity, while minimizing costs and risks.”

BHGE said it will help customers acquire, transport and refine hydrocarbons more efficiently, productively and safely, with a smaller environmental footprint and at lower cost per barrel. According to GE, the new company “brings together capabilities across the full value chain of oil and gas activities—from upstream to midstream to downstream.”

BHGE—with headquarters in Houston and London—will have four product companies: oilfield services; oilfield equipment; turbomachinery and process solutions; and digital solutions. In addition, it has 24 product lines and segments.

“BHGE has proven technologies and experience with the spirit of a startup, and our leadership team looks forward to quickly demonstrating the strengths of the new company,” Simonelli said. “Our focus is on integrating our businesses quickly and seamlessly so we can drive long-term value for all of our stakeholders.”

Jeff Immelt, GE chairman and CEO, is serving as chairman of the board of directors of Baker Hughes. Martin Craighead, former chairman and CEO at Baker Hughes, is vice chairman of the board.

“The completion of the transaction marks a new era in the industry,” Immelt said, “and I am extremely proud of our team’s focus, dedication and diligence, which resulted in the completion of this combination in just eight months.”

In November 2014, Baker Hughes and Halliburton announced plans to merge. However, in May 2016, the two companies called off the deal because of problems in obtaining approvals from regulators in the U.S. and overseas. In addition, the companies cited the downturn in the oil and gas industry as being damaging to the economics of the transaction.