The takeover of Baker Hughes Inc. was completed by General Electric Co. (GE - Free Report) where the latter integrated its oil and gas equipment and service operations. This has made General Electric the world's second largest oilfield service provider in terms of revenue.
The new company – Baker Hughes, a GE company – will start trading on Jul 5 on NYSE under the ticker "BHGE".
The merged company, with headquarters in London and Houston, will have about $23 billion in annual revenues and provide oilfield gear along with blowout preventers, pumps, drilling, chemicals, other products and services for oil producers in 120 countries.
The deal helps Baker Hughes to expand and become an important player in the industry. This is a positive sign for the company after antitrust concerns ruined a tie-up last year with rival Halliburton Co. (HAL - Free Report) . The GE deal takes the merged business past Halliburton to compete with only Schlumberger NV (SLB - Free Report) for dominance in the global oilfield service market.
Meanwhile, the deal helps GE to focus more on the oil and gas sector, particularly in North America, while protecting the parent company's earnings from the energy industry's boom and bust cycles. General Electric's oil and gas-related businesses will be folded into the new company, with a partnership of 62.5% held by General Electric. Baker Hughes shareholders will own the remaining and receive a one-time dividend of $17.50.
The announcement of the deal last autumn implied that the recovery in oil prices would be $60 per barrel by 2019. This increase seems unlikely with excess supply of crude prevailing worldwide, which will bring prices below $50.
However, the executives at the new company believe that the merger is expected to help customers perform better if prices stay low.
The new company will have about 70,000 employees and be headed by Simonelli and 14 senior executives. Only five of those executives will be legacy Baker Hughes employees, with most of them from General Electric.
The company will have access to General Electric's research and development facilities and be able to access General Electric’s Predix software and analytics.
Shares of the company have lost 4.4% over the last three months while the Zacks categorized Oil & Gas – Field Services industry has declined 13.2% in the same time span.
Baker Hughes currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
The takeover of Baker Hughes Inc. was completed by General Electric Co. (GE - Free Report) where the latter integrated its oil and gas equipment and service operations. This has made General Electric the world's second largest oilfield service provider in terms of revenue.
The new company – Baker Hughes, a GE company – will start trading on Jul 5 on NYSE under the ticker "BHGE".
The merged company, with headquarters in London and Houston, will have about $23 billion in annual revenues and provide oilfield gear along with blowout preventers, pumps, drilling, chemicals, other products and services for oil producers in 120 countries.
The deal helps Baker Hughes to expand and become an important player in the industry. This is a positive sign for the company after antitrust concerns ruined a tie-up last year with rival Halliburton Co. (HAL - Free Report) . The GE deal takes the merged business past Halliburton to compete with only Schlumberger NV (SLB - Free Report) for dominance in the global oilfield service market.
Meanwhile, the deal helps GE to focus more on the oil and gas sector, particularly in North America, while protecting the parent company's earnings from the energy industry's boom and bust cycles. General Electric's oil and gas-related businesses will be folded into the new company, with a partnership of 62.5% held by General Electric. Baker Hughes shareholders will own the remaining and receive a one-time dividend of $17.50.
The announcement of the deal last autumn implied that the recovery in oil prices would be $60 per barrel by 2019. This increase seems unlikely with excess supply of crude prevailing worldwide, which will bring prices below $50.
However, the executives at the new company believe that the merger is expected to help customers perform better if prices stay low.
The new company will have about 70,000 employees and be headed by Simonelli and 14 senior executives. Only five of those executives will be legacy Baker Hughes employees, with most of them from General Electric.
The company will have access to General Electric's research and development facilities and be able to access General Electric’s Predix software and analytics.
Shares of the company have lost 4.4% over the last three months while the Zacks categorized Oil & Gas – Field Services industry has declined 13.2% in the same time span.
Baker Hughes currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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