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GE to merge oil & gas business with Baker Hughes

Under the terms of an agreement between the two companies, existing Baker Hughes shareholders will receive a special one-time cash dividend of US$17.50 per share and 37.5% of the “New” Baker Hughes, while GE will own the remaining 62.5%.

GE will contribute US$7.4 billion to fund the US$17.50 per share special dividend.

Lorenzo Simonelli, president and CEO of GE Oil & Gas, will be president and CEO of the “New” Baker Hughes. Jeff Immelt, chairman and CEO of GE, will serve as chairman of the board of directors, while Martin Craighead, Baker Hughes chairman and CEO, will become vice chairman of the board.

“This transaction creates an industry leader, one that is ideally positioned to grow in any market. Oil & gas customers demand more productive solutions. This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes,” said Jeff Immelt, chairman and CEO of GE.

Martin Craighead, chairman and CEO of Baker Hughes, said: “This compelling combination brings together best-in-class oilfield equipment manufacturing and services, and digital technology offerings for the benefit of all customers and stakeholders. The combination of our complementary assets will create a platform capable of seamless integration while we enhance our ability to deliver optimized and integrated solutions and increase touch points with our customers.”

The “New” Baker Hughes will have dual headquarters in Houston, Texas and London, UK.

The transaction, which is expected to close in mid 2017, is subject to approval by Baker Hughes shareholders, regulatory approvals and other customary closing conditions.