01 Nov GE and Baker Hughes to merge oil & gas divisions
General Electric (GE) and Baker Hughes will merge their oil and gas branches to combat the effects of the global crude oil price slump.
General Electric will pay US$7.4 billion to Baker Hughes as part of the deal to take a 62.5% controlling stake in the enlarged company.
The merger will create the second largest player in the oil and gas industry in terms of revenue – $32 billion altogether – which will operate in more than 120 countries.
The companies said that the combination of the divisions cut costs by $1.6 billion per year.
Jeff Immelt, chairman and CEO of GE said: “This transaction creates and industry leader, one that is ideally positioned to grow in any market.
“Oil and gas customers demand more productive solutions. This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes.”
Baker Hughes chairman and CEO Martin Craighead said: “This compelling combination brings together best-in-class oilfield equipment manufacturing and services and digital technology offerings.”