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General Electric said Monday that it will merge its oil and gas business with Baker Hughes.

The new company will have combined revenue of about $32 billion.

GE Oil & Gas will merge with Baker Hughes to “create a world-leading oilfield technology provider with a unique mix of service and equipment capabilities,” GE said.

The merger agreement calls for Baker Hughes shareholders to 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 merged company.

The transaction is expected to close in mid 2017. It still needs approval of Baker Hughes shareholders and regulators.

A proposed merger last year between Baker Hughes and Halliburton was rejected by U.S. antitrust regulators.

GE will contribute $7.4 billion to the new company that will be used to fund the cash dividend to existing Baker Hughes shareholders.

GE said the agreement has been unanimously approved by the boards of directors of both companies.

The merged firm will provide equipment, technology and services for the oil and gas industry and is expected to have $32 billion of combined revenue and operations in more than 120 countries.

The companies expect the merger to generate total runrate synergies of $1.6 billion by 2020, that has a net present value of $14 billion.

“While this is primarily driven by cost out, we believe that the new company is positioned for growth as the industry rebounds,” GE said.

The merged company will have dual headquarters in Houston, Texas and London, UK.
GE chairman and CEO Jeff Immelt will serve as Chairman of the Board of Directors for the merger company.
Baker Hughes chairman and CEO Martin Craighead will serve as Vice Chairman of the Board.
GE Oil & Gas president and CEO Lorenzo Simonelli will serve as president and CEO of the merged company.
The remainder of the executive leadership team will be a combination of existing leaders from both GE and Baker Hughes.
Upon closing, the Baker Hughes board will consist of nine directors.
Immelt and four other board members will be appointed by GE and four board members, including Craighead, will be appointed by Baker Hughes.
GE and Baker Hughes said they are “committed to working constructively with the relevant government regulators to achieve the necessary approvals.”
“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,” Immelt said.