Baker Hughes Explored Possible Takeover -- WSJ
October 12 2017 - 3:02AM
Dow Jones News
By Dana Mattioli and Thomas Gryta
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 12, 2017).
General Electric Co.'s Baker Hughes recently held takeover talks
with energy-services company Subsea 7 SA, according to people
familiar with the matter.
The talks recently broke down over price, but it is possible
they could be revived, one of the people said.
As of Tuesday, U.K.-based Subsea 7 had a market value of $5.4
billion. The company is a construction-and-services contractor for
the offshore energy industry. Year to date, its stock price is up
nearly 30%.
American depositary receipts of Subsea 7 closed 4.2% higher on
Wednesday after The Wall Street Journal's report of the talks.
Baker Hughes -- officially known as Baker Hughes, a GE Company
-- was formed in July when GE closed a deal to combine its
oil-and-gas business with Baker Hughes Inc. The company, which has
a $40 billion market value, is 62.5% owned by GE and 37.5% owned by
Baker Hughes shareholders.
Earlier this year, Subsea 7 made a bid for the struggling
operations of EMAS Chiyoda Subsea Ltd. -- whose fleet of ships puts
together offshore-drilling projects -- under a proposal filed with
a U.S. Bankruptcy Court.
The oil-field-services sector has been consolidating as boards
of directors have identified greater scale as a way to advance.
Baker Hughes, prior to merging with GE's oil-and-gas business, had
agreed to merge with service company Halliburton Co., but that deal
fell apart.
The industry has struggled since 2014 as oil prices fell from
over $100 a barrel to less than $30. The price is now hovering
around $50.
The industry shed tens of thousands of jobs during the slump and
was forced to accept pricing cuts -- sometimes more than 50% --
from its customers. More than 200 oil-field-service companies went
bankrupt.
On Monday, the Journal reported that offshore energy company
Helix Energy Solutions Group Inc. is exploring a sale. In August,
the Journal reported that Dover Corp. was exploring strategic
options for most of its energy business, including a sale, merger
or spinoff of the business, which makes industrial energy
equipment.
Write to Dana Mattioli at dana.mattioli@wsj.com and Thomas Gryta
at thomas.gryta@wsj.com
(END) Dow Jones Newswires
October 12, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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