GE and Baker Hughes announce $32 Billion Merger

HOUSTON, TX -- Houston-based Baker Hughes has announced a $32 billion merger with General Electric’s Oil and Gas Division that will create a new and powerful player in the oil and gas industry.

News of the pending deal was reported in the Wall Street Journal Sunday, a day before the official announcement was made.

Those plans were confirmed early Monday in a public statement from both companies.

The mega merger combines the nation’s largest industrial giant with the world’s third-largest energy services company, and comes a few short months after Halliburton attempted $35 billion acquisition of Baker Hughes was quashed by the U.S. Justice Department amid anti-competition concerns.

As a result, Halliburton paid a $3.5 billion termination fee to Baker Hughes, and a short time later, Baker Hughes announced plans of future changes to their business structure.

The newly merged company will still be known as Baker Hughes and listed on the New York Stock Exchange, and will maintain dual headquarters in London and Houston.

GE will own 62.5 percent and Baker Hughes shareholders will own 37.5 percent of the new company, which will have $32 billion of combined revenue and operations in more than 120 countries.

GE plans to contribute $7.4 billion to fund the $17.50 per share special dividend to existing Baker Hughes shareholders, according to the Houston Business Journal.

The deal is expected to finalized by mid-2017.

Image: Richard Masoner via Flickr