GE and Baker Hughes announced a merger to create a world-leading oil field technology provider with “a unique mix of service and equipment capabilities”.
According to the two firms, the new company will be a leading equipment, technology and services provider in the oil and gas industry, providing physical and digital technological solutions for customer productivity.
“This transformative transaction will create a powerful force in the oil and gas market as we continue to drive long-term value for our customers and shareholders,” GE Oil & Gas CEO, Lorenzo Simonelli, said.
GE and Baker Hughes Merge into Oil & Gas Leader
The new company will represent US$32 billion (£26 billion) of combined revenue and operations in more than 120 countries.
Additionally, under the terms of the agreement, GE will own 62.5% of the company, while the transaction is expected to close in mid-2017.
The Baker Hughes Technology Center
According to the Chairman and CEO of GE, Jeff Immelt, the transaction will create an “industry leader” in the delivery of digitally enabled offerings through an oil field service platform.
The new company will be based in Houston, Texas and London, UK.
Jeff Immelt, Chairman and CEO of GE will serve as Chairman of the Board of Directors and Lorenzo Simonelli, president and CEO of GE Oil & Gas, will serve as President and CEO.
A New Oil and Gas Service Platform
“This compelling combination brings together best-in-class oil field equipment manufacturing and services, and digital technology offerings for the benefit of all customers and stakeholders,” Baker Hughes Chairman and CEO, Martin Craighead, said.
“The combination of our complementary assets will create a platform capable of seamless integration while we enhance our ability to deliver optimised and integrated solutions and increase touch points with our customers,” he added.
Baker Hughes had been in discussions to merge with another oil field services provider, Halliburton, but the merger fell through earlier this year after a series of regulatory issues.