Baker Hughes to Place Some Operations Into New Land Pressure Company
30 November 2016 - 10:10AM
Dow Jones News
Baker Hughes Inc.'s North American cementing and hydraulic
fracturing operations will become part of a new company operating
under the BJ Services brand and majority-owned by two
private-equity investors.
CSL Capital Management and West Street Energy Partners will
contribute $325 million in cash, with $175 million slated for the
new company's balance sheet and $150 million going to Baker
Hughes.
CSL's Allied Energy Services platform will become part of the
new entity.
Houston firm CSL and West Street, a fund affiliated with Goldman
Sachs Group Inc., will own 53.3% of BJ Services, while Baker Hughes
will hold 46.7%.
Baker Hughes said the move is in line with its asset-light
strategy and will enable the company to participate in the land
pressure pumping market while "reducing capital intensity."
The oil-field services company is retaining its international
pressure pumping businesses and its Gulf of Mexico offshore
pressure pumping operations.
Baker Hughes bought BJ Services Co. for $5.5 billion in
2010.
Allied Energy Services Chief Executive Warren Zemlak will be CEO
of BJ Services.
As the industry suffered from a severe pricing downturn, Baker
Hughes planned to sell itself to Halliburton Co. for $35 billion.
After that combination was called off amid regulatory opposition,
the company announced another big transaction on Oct. 31. General
Electric Co. plans to combine its oil-and-gas unit with Baker
Hughes. GE will own almost two-thirds of the new Baker Hughes and
include its results in GE's financial reports while paying Baker
Hughes shareholders a $7.4 billion cash dividend.
Baker Hughes shares were down 48 cents at $60 in after-hours
trading Tuesday.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
November 29, 2016 17:55 ET (22:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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