NYSE: Debut of the oil giant from the merger of GE and Baker Hughes

05.07.2017 / 15:12

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It's out with the old Baker Hughes (BHI) and in with the new, after its merger with General Electric's (GE) oil and gas business was completed today. On Wednesday, the combined entity will begin trading under the new ticker BHGE, but that means we have one more day of Baker Hughes trading under its older ticker.

And Baker Hughes is going out in style. Its stock has jumped 5.4% to $57.45 at 12:35 p.m. today, while General Electric has gained 1.8% to $27.51.

Baker Hughes is aiming to harness the strength of General Electric in big data after the pair on Monday completed their deal to create the second-biggest oil field services group by revenues after Schlumberger.

Lorenzo Simonelli, chief executive of GE Oil & Gas who has taken charge of the enlarged group, said digital technology had the potential to improve productivity by an average of 5 percentage points across the oil and gas industry.

The revamped Baker Hughes aimed to help unlock those benefits by drawing on GE’s ability to capture and analyze growing volumes of data from oil and gas operations — with the aim of helping customers become more reliable and efficient.

Mr Simonelli said new technology was crucial to helping improve the economics of oil and gas production at a time when crude prices are experiencing renewed weakness below $50 per barrel.

As well as contributing its existing oil and gas business to the new entity, GE agreed to pay $7.4bn for its 62.5 per cent stake in the combined group.

The enlarged group, to be known as “Baker Hughes, a General Electric company”, will have combined revenues of about $23bn. Its capabilities span equipment and services in all parts of the oil and gas industry from upstream exploration and production to downstream refining and petrochemicals.

Source: Financial Times

Jr Trader Alexander Kumanov

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NYSE: Debut of the oil giant from the merger of GE and Baker Hughes

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