Houston-based global oilfield services giant Baker Hughes is teaming up with the oil and gas business of Boston-based General Electric in a new entity with combined estimated revenues of $32bn and around 70,000 employees.
The new entity will be 62.5% owned by GE and 37.5% by Baker Hughes.
At a time of slump in the oil industry this move is seen as a way of spreading risk as well as creating new ways forward.
It will bring together Baker Hughes’ oilfield services experience and technology with GE’s oil and gas technology, manufacturing pedigree and digital platform. GE is heavily into rebranding itself as a “digital industrial” company and has invested hugely in its Predix operating system which it hopes will become the gold-standard system for industry.
GE’s digital prowess is a big attraction because it offers the prospect of software that enhances data analysis, a vital element of the oil industry’s future.
The boards of both firms have unanimously approved the deal to shareholders and it is expected to be finalized in mid-2017, providing it gets approval from regulators and shareholders.
In May this year Baker Hughes failed in an attempted merger with Halliburton, a deal scuppered when it ran afoul of US and European anti-trust regulations.