Current BHI Stock Info

Consolidation Will Create a Services Company "Ideally Positioned to Grow in any Market"
Baker Hughes (ticker: BHI) will merge with GE’s (ticker: GE) oil and gas segment, forming a new company called Baker Hughes, A GE Company, with $32 billion in revenues, the two companies announced today.

Today’s news follows the unraveling of BHI’s attempted merger with Halliburton (ticker: HAL) in May.

The resulting company is expected to be more cycle-resistant, according to the executives. "This transaction creates an industry leader, one that is i...

Analyst Commentary

From Capital One:

Very positive. BHI and GE have reached an agreement where GE's oil and gas business will combine w/ BHI to form "new" BHI that will be publicly traded. BHI shareholders will own 37.5% of the new company and will receive a $17.50/sh special dividend while GE will own 62.5% of the company. The transaction is expected to close in mid '17, and GE oil and gas CEO Lorenzo Simonelli will serve as the CEO of the new entity w/ Martin Craighead becoming the Vice Chairman. Conf erence call at 7:30 AM Central.

Combined company: The new company had ~$32B of revs in '15 w/ a fairly equal split b/t BHI and GE oil and gas, and the combination will create the second largest player in the oilfield equipment and services industry. GE's fullstream oil and gas manufacturing and technology solutions across subsea and drilling, rotating equipment, imaging, and sensing will complement BHI's main product lines of artificial lift, directional drilling, chemicals, and completion equipment. Initial synergies are pegged at a run rate of $1.6B by 2020.  

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