The U.S. Department of Justice (DOJ) has requested further information from General Electric (GE) and Baker Hughes related to their pending combination, which created the second-largest oilfield services business behind world’s No. 1 Schlumberger.
The companies said in a joint statement earlier this week that the second request, issued under an antitrust improvement act, was expected and a normal part of the DOJ review process. “The effect of the second requests is to extend the waiting period … until 30 days after GE and Baker Hughes have substantially complied with the requests,” they added.
The transaction is still subject to clearance from Baker Hughes’ shareholders and other approvals, but it remains on schedule to close in mid-2017, Kallanish Energy learns.
Under the deal announced last October, Baker Hughes’ shareholders would receive a special, one-time cash dividend of $17.50 per share — $7.5 billion — and 37.5% of the new, New York Stock Exchange-traded company. GE would hold control of the new company.
The proposed combination creates a company with more than $32 billion in revenue that could cut costs to better compete with rivals such as Schlumberger and Halliburton. It would also allow GE to benefit from an expected recovery in the industry without having to pay for a full acquisition of Baker Hughes.
The U.S. Department of Justice (DOJ) has requested further information from General Electric (GE) and Baker Hughes related to their pending combination, which created the second-largest oilfield services business behind world’s No. 1 Schlumberger.
We’ll have to feel if this hiccup leads to indigestion. As usual, we’ll monitor this closely and keep you updated.
Joseph Barone
www.ShalesDirectories.com