Energy company General Electric (GE) has announced that it has begun to sell off its entire stake in oil and gas company Baker Hughes, with whom it merged its own oil and gas business with in 2017.
According to reports, GE will initially bring its stake in the company down from 62.5% to 38.4% in a move that it expects will generate $2.7bn in funding.
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As part of this, GE has made a public offering of 115 million shares of Baker Hughes’ Class A common stock at a price of $21.50 each and will also sell $250m of Baker Hughes’ Class B common stock. GE will still have a controlling stake in the company but will eventually sell that too.
GE CEO Lawrence Culp said: “Reducing GE’s ownership in Baker Hughes continues our efforts to improve our financial position by generating approximately $2.7bn in net proceeds to GE. This offering builds on several recent deleveraging steps we have taken, and we will continue to take action in 2019 and 2020 to achieve our leverage targets.”
As a result of the news, GE’s stock rose by over 2% from $9.14 to $9.36 a share, giving it a current market capitalisation value of $81.7bn. The company’s share had peaked at $10.88 a share on 27 February, but fell to $8.01 on 16 August after financial investigator Harry Markopolos accused the company of accounting fraud.
GE share price in 2019
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By GlobalDataMeanwhile Baker Hughes’ share price dropped by over 7.5% from $24.11 to $22.29 a share, some way down from the company’s peak of $28.46 a share on 21 March.
Baker Hughes share price in 2019
