General Electric Co. (NYSE:Â GE) said June 26 it plans to pursue an orderly separation from Baker Hughes Inc. (NYSE:Â BHGE) as the Boston-based conglomerate chooses to narrow its focus on its aviation, power and renewable energy businesses.
The announcement comes roughly a year after GE completed its buyout of Baker Hughes, merging the company with its GE Oil & Gas division and creating the world’s second-largest oilfield service provider by revenue.
GE plans to fully separate its 62.5% interest in Baker Hughes in an “orderly manner†over the next two to three years, the company said in the release.
Analysts with Tudor, Pickering, Holt & Co. (TPH) said the news as it relates to Baker Hughes is both good and bad.
“Good news is that investor concerns that GE would find a way to jettison its 62.5% interest in Baker Hughes in one fell swoop over near-term were misguided. Bad news [in terms of supply/demand for BHGE shares] is that GE does indeed plan to fully separate from Baker Hughes over next two to three years,†TPH analysts said in a morning note on June 26.
Rumors began circulating late last year that GE was considering shedding its holdings in Baker Hughes before the expiration of a two-year lockup period the companies set as part of their merger agreement. Though GE CFO Jamie Miller dispelled speculation after she affirmed the company’s commitment to Baker Hughes at a conference in February.
