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General Electric to offload Baker Hughes stake
Posted on Thursday, 30 July 2020 15:05
General Electric has announced plans to divest its 37.0 per cent stake in Texan oil and gas equipment manufacturer Baker Hughes over the coming three years.
Based on the target’s close of USD 15.87 on 28th July, the last trading day prior to the deal being announced, the deal can be valued at USD 5.98 billion.
Proceeds of the transaction have been earmarked for the repayment of debts, which currently total USD 81.90 million.
This is not the first divestment General Electric has announced this year; in May, it signed on the dotted line to offload lighting equipment manufacturing unit GE Lighting to Savant Systems for an undisclosed consideration.
H Lawrence Culp, chief executive of the vendor, said the move will help it focus its operations.
It has also been linked with a sale of its steam power unit; in January, people in the know told Bloomberg that it was considering jettisoning the business in a bid to raise cash and revive its ailing energy unit.
The sources, who did not wish to be identified, said the firm intended to gauge investor interest over the next few months and could still decide to retain the division.
Baker Hughes is an energy technology company with operations in some 120 countries worldwide.
The firm employs around 60,000 people.
It generated revenue of USD 4.74 billion for the three months to 30th June 2020, down from USD 5.99 billion over the corresponding timeframe in the previous year.
A sale of the business at the reported value would make the deal the largest targeting a manufacturer of oil and gas field machinery and equipment to have been announced worldwide since the start of 2020, according to Zephyr, the M&A database published by Bureau van Dijk.
© Zephus Ltd