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Date: 1 November 2016 18:46A+
Baku, November 1, AZERTAC
General Electric Co. is creating a $32 billion oil business by combining its petroleum-related operations with Baker Hughes Inc., betting on a rebound for an industry mired by a historic slump in crude prices, according to Bloomberg.
The new company will be one of the industry’s largest players, bringing together a portfolio of capabilities spanning oilfield services, equipment manufacturing and technology. GE will own 62.5 percent of the merged entity, which will be publicly traded, the companies said Monday. The deal is expected to close in the middle of next year.
The transaction is subject to approval by regulators and Baker Hughes shareholders, as well as other customary closing conditions. GE will contribute $7.4 billion to fund a special dividend of $17.50 a share to Baker Hughes stockholders.
GE rose 0.9 percent to $29.49 at 10:26 a.m. in New York, while Baker Hughes fell 0.5 percent to $58.82. GE had fallen 6.2 percent this year through Friday, compared with a 4 percent gain in the Standard & Poor’s 500 Index. Baker Hughes rose 28 percent over the same period.
Lorenzo Simonelli, CEO of GE Oil & Gas, will serve in the same role at the “new Baker Hughes,” while Immelt will be chairman and Baker Hughes CEO Martin Craighead will be vice chairman, according to the statement. The company will have dual headquarters in Houston and London.