US authorities confirmed the merger of Baker Hughes and oil and gas division of General Electric (GE). The both companies will establish a new oil and gas giant with estimated market value of 32 billion USD. The companies reached an agreement with the US Department of Justice for completion of the proposed transaction, while the Australian Competition and Consumer Commission said they would not oppose the merger. Part of the deal for receiving authorities agreement was sale of GE Water & Process Technologies (GE Water) to Suez for 3.4 billion USD after closing the Baker Hughes transaction.
“Today’s milestone represents significant progress toward creating an oil and gas productivity leader positioned to deliver value for customers, employees and shareholders”, said the statement of Baker Hughes.
Under the agreement, General Electric (GE) will combine Baker Hughes with its oil and gas business, creating a company with 23 billion USD in annual revenue. Existing Baker Hughes shareholders will own 37.5% of the new company, while GE will own the remaining 62.5%. General Electric (GE) will pay existing Baker Hughes shareholders 7.4 billion USD for a special dividend.
The companies also recently received clearance from the European Commission to complete the transaction announced in October 2016, without conditions. Baker Hughes scheduled its shareholders vote for June 30 and the pair continues to target a mid-year close.