Business

Baker Hughes’ Merger With GE Would Create Second-Largest Oilfield Services Company

The deal will boost Baker Hughes but probably also lead to more layoffs.

The $32 billion merger would make Baker Hughes the No. 2 oilfield services company after Schlumberger.

The announcement comes six months after a failed merger between Baker Hughes and Halliburton, which is currently the No. 2.

Martin Craighead, chairman and CEO of Baker Hughes, hailed the deal on a conference call with investors Monday.

“Together, Baker Hughes and GE Oil & Gas will create and end-to-end provider of technology, equipment and services across the full spectrum of the oil and gas value chain – upstream, midstream and downstream,” he said.

Craighead would be vice chairman of the new “Baker Hughes, a GE company.”

Ed Hirs, energy economist at the University of Houston, said the merger is a smart move for both GE and Baker Hughes, because they will complement each other’s services.

But it’ll probably also mean fewer jobs in Houston.

“You don’t need two CFOs, you don’t need two accounting departments, you don’t need two purchasing agents,” he said. “So there’s going to be another round of layoffs coming because of this merger.”

That comes after Baker Hughes has already laid off 6,400 employees worldwide this year amidst $2.3 billion in losses.

Houston will share the company’s headquarters with London.

The deal is expected to close in mid-2017, if regulators approve it.

 

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Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters, the Houston Press Club, National Association of Real Estate Editors, and Public Radio...

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