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Item 1.01
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Entry into a Material Definitive Agreement.
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Equity Repurchase Agreement
On September 9, 2019, Baker Hughes, a GE company (the “Company”) and Baker Hughes, a GE company, LLC (“BHGE LLC”) entered into an agreement with General Electric Company (“GE”) and GE Oil & Gas US Holdings I, Inc. (together with GE, the “GE Parties”) related to the repurchase of the Company’s Class B common stock, par value $0.0001 per share (“Class B common stock”), and the corresponding BHGE LLC common units (the “Agreement”).
Under the terms of the Agreement, the Company will repurchase from the GE Parties, in a privately negotiated transaction, $250,000,000 of shares of the Company’s Class B common stock, together with an equal number of associated BHGE LLC common units (“LLC Units”), at a price equal to the price per share at which certain underwriters will purchase shares of the Class A common stock from certain GE Parties in the Offering. The Offering is not conditioned upon the completion of the share repurchase, but the share repurchase is conditioned upon the completion of the Offering and will be completed immediately following the Offering.
The foregoing description of the Agreement is not a complete description thereof and is qualified in its entirety by reference to the full text of the Agreement, which is filed as Exhibit 10.1 to this Current Report on Form
8-K
and is incorporated herein by reference.
On September 10, 2019, the Company issued a press release announcing the offering by GE of 105 million shares of Class A common stock of the Company (the “Offering”). The underwriters will have the option to purchase within 30 days from the date of the prospectus supplement relating to the Offering up to an additional 15.75 million shares of Class A common stock from GE. In connection with the Offering, the Company also announced that, while it has not completed its third quarter, given recent geopolitical and industry driven dynamics, timing of certain customer and supply chain driven events may modestly impact its third quarter results and shift into the fourth quarter. In connection with this offering and within the 20-40 basis point negative impact of the GE separation previously outlined, the Company expects to begin to incur increased separation expenses. Such expectations are forward looking, and no undue reliance should be placed on these expectations. See “Cautionary Statement Concerning Forward-Looking Statements.”
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This report shall not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities law of any such jurisdiction.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements contained in this report constitute “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. All statements, other than historical facts, including statements regarding the presentation of our operations in future reports and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Forward looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved.
Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, the risk factors identified in the “Risk Factors” section of the Annual Report on Form
10-K
for the year ended December 31, 2018, the Quarterly Reports on Form
10-Q
for the quarterly period ended March 31, 2019 and the quarterly period ended June 30, 2019 and those set forth from
time-to-time
in other filings by BHGE with the SEC. These documents are available through our website or through the SEC’s Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov. The Company undertakes no obligation to, and expressly disclaims any obligation to, publicly update or revise any forward-looking statement, whether as a result of new information or developments, future events, or otherwise.