The GE-Baker Hughes Merger: An MBA Student's Perspective

General Electric completed its buyout of Baker Hughes Inc, merging it with its own oil and gas equipment and services operations to create the world's second-largest oilfield service provider by revenue. GE will hold 62.5% of the new company and the remaining 37.5% will be held by shareholders.

Advantages of the Merger:

• GE Oil & Gas is the leader in oil extraction equipment manufacturing (upstream operations). While Baker Hughes is the leader in consulting and services related to oil extraction, (downstream operations). Therefore, this is a complementary merger. Both the companies fit together perfectly like the pieces of a puzzle. It will be easy to achieve strategic fit.
• The combined entity will have access to both European as well as American Markets, thus expanding market presence.
• The GE- Baker deal might also move the sector towards embracing Big Data in production optimisation.