GE to Shed Majority Control of Baker Hughes

Wednesday, September 11, 2019

General Electric is looking to raise up to $3 billion in sale of majority-owned Baker Hughes shares, resulting in a reduction of the U.S industrial conglomerate's stake in the oilfield services provider to less than 50%, Baker Hughes said on Tuesday.

Shares of Baker Hughes, in which GE owned an about 50.4% stake as of June 30, fell 3.7% to $23.20 in after hours trading, while GE's were marginally up at $9.15.

GE had long planned to sell down its stake in Baker Hughes.

But the issue came under scrutiny last month when Madoff whistleblower Harry Markopolos issued a lengthy report that alleged in part that GE was improperly counting Baker Hughes' income, capital and cash in GE's financial statements.

GE has said its accounting was appropriate since it is the majority shareholder.

Baker Hughes said GE would sell up to 120.75 million shares, including over-allotment option, of Baker Hughes' Class A common in a secondary offering. Baker Hughes will additionally repurchase $250 million of Class B common stock from GE in a private transaction.

GE currently owns about 522 million shares of Baker Hughes, and has said previously that a reduction in its ownership interest below 50% in Baker Hughes will result in GE 'deconsolidating' its oil and gas business.

GE's cash generation has failed to keep pace with earnings in recent years, causing the company to cut its dividend and divest non-core assets in order to raise billions of dollars in cash to meet its financial obligations.

Baker Hughes said the deal would also shrink the industrial conglomerate's presence on the oilfield services company's board to one seat from five.

General Electric wants John Rice to be its designated member on the Baker Hughes board, while Lorenzo Simonelli and Geoffrey Beattie are expected to continue as directors, but not as GE representatives.


(Reporting by Debroop Roy and Ankit Ajmera; Editing by Shailesh Kuber)

Categories: Technology Finance Industry News

Related Stories

Brent Near $114 as Middle East Conflict Continues

Thailand Cancels Offshore Energy Exploration Pact with Cambodia

Vessel Sector Deep Dive: WTIVs

Technology as Enabler of Energy Security in Offshore Asia

Bureau Veritas Expands Offshore Services with New Asia Hub

Eni Makes Major Gas Discovery Offshore Indonesia

Pertamina Unit to Operate Indonesia’s Lavender Block under 30-Year PSC

Metropolitan CCS Cleared to Drill CO2 Storage Wells off Japan

Chiyoda, NYK, KNCC Target Global CCS Value Chain Development

TVO Customizes Tethered BOP Technology

Current News

ADNOC Drilling Finalizes MB Petroleum JV, Expands Regional Fleet

Brent Near $114 as Middle East Conflict Continues

Thailand Cancels Offshore Energy Exploration Pact with Cambodia

Vessel Sector Deep Dive: WTIVs

Indonesia’s Mako Gas Project on Track for First Gas in 2027

CNOOC’s First Quarter Profit Rises on Higher Oil Prices, Output

UAE Exit Weakens OPEC, Raises Risk of Price War

United Arab Emirates Exits OPEC and OPEC+

Technology as Enabler of Energy Security in Offshore Asia

Saipem Poised for Middle East Repair Work After Iran War

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com