GE Changes Course on Selling Baker Hughes Stake
February 21 2018 - 1:06PM
Dow Jones News
By Thomas Gryta
General Electric Co. has no intention of selling down its
majority stake in oil services firm Baker Hughes before 2019, the
company's finance chief said Wednesday, in a shift from its
previous exploration of exiting the business.
GE combined its struggling oil and gas business with Baker
Hughes last year to form a new public company. As part of a major
restructuring of the industrial giant, new Chief Executive John
Flannery said in November that he would explore selling the stake
before restrictions lift in 2019.
"Given today's valuation levels, we see a lot of upside there,"
said Chief Financial Officer Jamie Miller at a Barclays conference
Wednesday. "At this point in time, we have no intent to change
anything or execute prior to the expiration of any of the lockup
periods."
Shares of Baker Hughes jumped on the news, recently trading up
4.5% to $27.61. The company has a market value of about $30
billion. GE owns about two-thirds of the company.
Since taking the reins as CEO in August, Mr. Flannery has cut
the dividend and financial projections while pledging to shed at
least $20 billion in assets. Mr. Flannery says he wants to simplify
the company and is also considering bigger moves including
separating the core divisions -- health care, aviation and power --
in what would amount to a breakup of the industrial giant.
GE is working on more than 20 deals to rearrange its portfolio
of businesses. It expects to cut costs by more than $2 billion in
2018 -- more than the $1.7 billion cut in 2017 -- and will soon
announce a revamped board of directors.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
February 21, 2018 12:51 ET (17:51 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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