US-based General Electric (GE) has decided to sell its stake in oil field services provider Baker Hughes, one year after acquiring it in July 2017.
GE will divest its majority 62.5 per cent stake in Baker Hughes over the next two to three years as part of CEO John Flannery's new strategy for the company.
The 126-year old company will also sell off its medical arm GE Healthcare, as it looks to consolidate its business in its core verticals of aviation, power and renewable energy.
Baker Hughes, a GE Company (BHGE), earned revenues of $21.9bn last year, falling short of the $23bn the new firm was projected to earn in combined revenues at the time of the merger closure.
BHGE’s oilfield services and equipment revenues declined by $700m, according to a report. Rivals Schlumberger and Halliburton posted higher revenues on the back of a resurgence in the North American hydraulic fracturing market.
Analysts say GE is likely to sell its stake in Baker Hughes in chunks of shares, rather than a one-off corporate disinvestment. That, coupled with anti-trust legislation in the US, make it improbable that either Halliburton of Schlumberger would court Baker Hughes for a full buy-out, as Halliburton had attempted to do in 2016.
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