Energy Juggernaut?

GE Oil & Gas merges with Baker Hughes

General Electric announced a merger of its oil and gas business with energy services provider Baker Hughes in a deal that structures the new publicly traded entity as a partnership jointly owned by each company’s shareholders.

According to GE and Baker Hughes, the new company would have approximately $32 billion in annual revenue and employ around 70,000 people. The companies expect to achieve $1.6 billion in annual “synergies” — which typically include cost cuts and combined purchasing power — by 2020. The deal is expected to be fully completed by mid-2017. GE CEO Jeff Immelt referenced an increased scale and diversification as key byproducts of the merger.

The new company will operate via dual headquarters in Houston and London with operations in more than 120 countries. Immelt will become chairman of the new company, and current GE Oil and Gas CEO Lorenzo Simonelli will be CEO of the combined entity. Baker Hughes’ chairman and CEO, Martin Craighead, will become vice chairman of the new company.

GE’s recent pledge to digital capability, including investments in software that enhances data analysis viewed as critical to the energy industry’s future, was a major incentive in the merger.

“We see an opportunity to unleash the power of digitization and data that has long been anticipated in the oil and gas sector,” Craighead told investors.

GE is already the world’s largest oilfield equipment maker, supplying blowout preventers, pumps and compressors used in exploration and production. Baker Hughes’ business includes drilling services, oil well construction, completion equipment and reservoir analysis.

The deal also comes nearly six months after Baker Hughes’ previous merger agreement with rival Halliburton collapsed following a regulatory fight with the U.S. government.

Trackbacks/Pingbacks

  1. Get Your Bearings | Electrical Apparatus Magazine - November 17, 2016

    […] October 17. One could call it a friendly partnership, one that easily flew under the radar of GE Oil & Gas’ merger with Baker Hughes just two weeks later—and the fact that SKF announced some less welcome news around that same […]

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