Baker Hughes Inc., (NYSE:BHI), and General Electric Co. (NYSE:GE) announced Monday June 12 that they have reached an agreement with the Department of Justice that would allow the parties to complete their proposed transaction.
To complete the deal, the Department of Justice announced that it will require General Electric and Baker Hughes to divest GE’s Water & Process Technologies business in order to proceed with their merger. The department said that the proposed transaction, without the divestiture, would substantially lessen competition for refinery chemicals and services in the United States.
Pursuant to a proposed consent decree filed today in District Court in Washington, D.C., GE has agreed that it will divest its GE Water & Process Technologies business after closing the Baker Hughes transaction, according to the two companies. GE announced in March that it had agreed to sell GE Water to Suez for $3.4 billion.
“Competition to provide refinery chemicals and services benefits a vital sector of our economy,” said Acting Assistant Attorney General Andrew Finch of the Antitrust Division. “Today’s action will ensure that oil and gas refiners continue to receive competitive prices for the chemicals and services needed to produce oil, gasoline, and other refined petroleum and natural gas products.”
GE and Baker Hughes announced their merger plans in October, shortly after the Justice Department objections to a proposed Halliburton-Baker Hughes deal led to the collapse of that plan.
The combination of GE’s oil and gas business with Baker Hughes will create a company with about $23 billion in annual revenue, according to the companies.