GE, Baker Hughes create powerful new player in energy sector

General Electric and Houston-based Baker Hughes are combining their oil and gas businesses to create a powerful player in an energy sector buffeted by years of weak prices.

HOUSTON- GE and Baker Hughes agreed to combine GE’s oil and gas business and Baker Hughes to create an oilfield technology provider with a unique mix of service and equipment capabilities.

In a release, GE and Baker Hughes said the combination creates an unparalleled company positioned to deliver value for customers and investors.

KHOU 11 News sat down with Energy Analyst Barbara Shook, a Senior Reporter-at-Large with Energy Intelligence, to find out what the merger could mean for jobs in the Houston-area.

“This transaction is probably going to have much more impact on middle management and upper management than say the Baker Hughes Haliburton deal would have had,” said Shook.

Shook says, if Halliburton and Baker Hughes merged they would have been duplicating far more jobs; meaning more people could have been laid off.

Meanwhile, GE is more of an automation company; the merger with Baker Hughes, a field operation company, means the complimentary combination could mean less layoffs in the field.

“GE has a huge presence in Houston and it’s been growing in recent years,” said Shook. “This will probably increase GE’s presence in Houston but whether that will make up for all the Baker Hughes jobs that are lost is still to be determined.”

The “New” Baker Hughes will have dual headquarters in Houston, Texas and London, UK. Jeff Immelt, Chairman and CEO of GE will serve as Chairman of the Board of Directors and Lorenzo Simonelli, president and CEO of GE Oil & Gas will serve as President and Chief Executive Officer. Martin Craighead, Baker Hughes Chairman and CEO, will serve as Vice Chairman of the Board.

“This transaction creates an industry leader, one that is ideally positioned to grow in any market. Oil & gas customers demand more productive solutions,” said Jeff Immelt. “This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes.”

The remainder of the executive leadership team will be a combination of existing leaders from both GE and Baker Hughes.

The release says the, “combination is an exceptional cultural fit. Both companies’ employees will benefit significantly from being part of a larger, more diversified company.

Here’s the entire release from GE and Baker Hughes. 

(© 2016 KHOU)


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