GE, Baker Hughes Questioned on Merger as US Seeks More Details Getty Images

GE, Baker Hughes Questioned on Merger as US Seeks More Details

GE announced a deal in October to combine its oil and gas business with Baker Hughes, forming one of the industry’s largest oilfield services and equipment companies. 

The U.S. Justice Department is seeking additional information from General Electric Co. and Baker Hughes Inc. over the pending merger to create an oil and gas behemoth.

The department’s actions extend the waiting period related to the regulatory review until 30 days after the companies comply, GE and Baker Hughes said Monday in a statement. The deal, subject to a shareholder vote and other approvals, is still expected to close around the middle of 2017. The information requested wasn’t specified.

“GE and Baker Hughes have been working cooperatively with the DOJ,” the companies said. The requests “are a normal part of the DOJ review process.”

GE announced a deal in October to combine its oil and gas business with Baker Hughes, forming one of the industry’s largest oilfield services and equipment companies. The agreement, giving GE a 62.5% stake, would deepen the company’s bet on an oil-market rebound the cost of absorbing all of Baker Hughes.

By joining forces, Baker Hughes and GE are trying to compete more effectively with the world’s top oilfield-services provider, Schlumberger Ltd., which bought equipment-maker Cameron International. Oilfield contractors are increasingly forming partnerships to help cut costs and expand their offerings and distribution channels amid the downturn. Baker Hughes had been the target in a failed 2016 acquisition by Halliburton Co.

GE plans to sell its water division in part to avoid possible regulatory pushback against the Baker Hughes deal. GE’s Water & Process Technologies unit, which makes chemicals and equipment for processing and filtration, overlaps in some areas with Baker Hughes’s operations.

South Africa’s Competition Commission on Monday recommended the Competition Tribunal approve the GE-Baker Hughes merger without conditions.

TAGS: The Economy
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish