Houston oilfield service giant Baker Hughes is poised to become an independent company again. And it could mean a change in the name of certain BHGE operations, even those in Oklahoma.
Boston industrial conglomerate General Electric will lose its majority ownership of Baker Hughes in a planned stock sale that could be worth more than $2.5 billion according to the Houston Chronicle.
The two companies announced the sale in a Tuesday afternoon statement. General Electric said it plans to sell 105 million of its shares of Baker Hughes common stock, meaning it will no longer be a majority owner. And that could mean a change in the name of operations which always included GE.
Among them was the BHGE Motor Center of Excellence which opened last spring in Oklahoma City. The center serves Western Hemisphere oil and gas operators who use downhole drillilng motors.
There is also the BHGE Oil and Gas Technology Center in Oklahoma which was launched in 2014. It was eventually renamed the BHGE Energy Innovation Center of North America. Whether GE will be removed from each center is unknown at this time.
At current prices around $24 per share, the sale could be worth more than $2.5 billion. At the same time, Baker Hughes is buying $250 million of its own Class B stock from General Electric.
As a majority owner of Baker Hughes, General Electric is able to appoint five members to the oilfield service company’s nine-member board of directors.
But under a separation agreement between the two companies, General Electric retains the right to appoint one board member when its ownership is below 50 percent but above 20 percent. The industrial conglomerate loses the right to appoint board members when its ownership of Baker Hughes dips below 20 percent.
General Electric informed Baker Hughes that it intends for its designee John Rice to remain on the Baker Hughes board of directors and asked for Jamie Miller and James Mulva to submit their resignations.
Lorenzo Simonelli and W. Geoffrey Beattie are expected to continue to serve on the Baker Hughes board of directors but not as General Electric designees.
Baker Hughes merged with the GE Oil & Gas in July 2017 with General Electric holding a 62.5 percent stake in the combined company.
But after reaching an agreement with the Baker Hughes board of directors, General Electric announced plans in July 2018 to sell its stake in Baker Hughes over a two- or three-year time frame.
Those plans accelerated in November when the struggling industrial conglomerate reduced its ownership stake to 50.4 percent, generating $4.4 billion from the sale.
During recent earnings calls, Baker Hughes executives have stressed that the little is expected to change in the company’s day-to-day operations if and when General Electric divests its holdings.
“We’ve always run BHGE as a strong, independent public company, and we’ll continue to do that,” Simonelli said in a call with investors earlier this year.