GE has completed the previously announced combination of GE’s oil and gas business with Baker Hughes.
Baker Hughes, a GE company (BHGE) is the first and only company to bring together industry-leading equipment, services and digital solutions across the entire spectrum of oil and gas development, GE said in a press release.
Jeff Immelt, chairman and CEO of GE and chairman of BHGE, said: “BHGE is an industry leader positioned to deliver in any economic environment and assist our customers in driving productivity. This deal capitalizes 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. 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.”
Under the terms of the transaction agreement, which was previously announced on October 31, 2016, the transaction resulted in a partnership structure, pursuant to which Baker Hughes was converted to a partnership and GE contributed its Oil & Gas business into that partnership. GE has a 62.5% interest in this partnership and legacy Baker Hughes shareholders have a 37.5% 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). $7.4 billion was contributed by GE to the new partnership, which will be used to fund the cash dividend to legacy Baker Hughes shareholders.