Baker Hughes buys BJ Services | Shanghai Daily

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September 1, 2009

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Baker Hughes buys BJ Services

OILFIELD services company Baker Hughes Inc said yesterday that it will buy BJ Services Co in a cash-and-stock deal valued at US$5.5 billion that the company said will allow it to drive international growth and compete for projects of companies engaged in all phases of the oil business.

The takeover is set to produce US$75 million in cost savings for Baker Hughes in 2010 and US$150 million in 2011, and add to earnings per share in 2011.

Baker Hughes Chairman, President and CEO Chad C. Deaton said in a statement that the transaction will particularly help customers with unconventional gas and deepwater fields.

"It will better position us to drive international growth and to compete for the growing large integrated projects by incorporating pressure pumping into our product offering," he added. Integrated oil companies are active in all phases of the business including production, refining, transportation and marketing.

Pressure pumping made up less than 1 percent of Baker Hughes' 2008 revenue, but is expected to comprise about 20 percent of the company's revenue after the deal is complete.

BJ stockholders will get 0.40035 share of Baker Hughes and US$2.69 in cash for each share they own. The deal represents a 16.3 percent premium to BJ's closing price of US$15.43 last Friday, the firms said.



 

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