GE to Give Up Majority Control of Baker Hughes
US engineering giant General Electric (GE) plans to shed 120.75mn shares in its oilfield services unit Baker Hughes, lowering its ownership to below 50%.
GE, which currently controls around 522mn shares in its subsidiary, has launched a secondary offering for class A common stock, Baker Hughes said in a September 10 statement. It will also sell $250mn of class B common stock to Baker Hughes in a privately negotiated deal.
Once the divestment is completed, GE will no longer have majority control over the company. Besides reduced voting power, GE will only be able to select one of Baker Hughes’ board members, compared with five at present.
GE bought a 62.5% stake in Baker Hughes back in 2017, in a bid to build up its oil and gas field services business particularly in North America. As the market showed only a modest recovery, GE decided to divest from the company the following year, in order to streamline its structure and cut debts.