General Electric (GE) Advances With Baker Hughes Separation

Pursuant to its decision to exit the oil and gas business, General Electric Company (NYSE:GE) has priced secondary offering of shares of Baker Hughes, a GE company (NYSE:GE) . Further, the company announced that it is selling another part of its stake in Baker Hughes in a private transaction.

It’s worth mentioning here that in June 2018, General Electric announced its plans to restructure its business portfolio in a bid to become a high-tech industrial company — focused on Aviation, Power and Renewable Energy. As part of the plan, the company decided to dispose of its 62.5% interest stake in Baker Hughes. The stake disposition is to be carried out in the next two to three years.

Details of Two Transactions

As disclosed, General Electric offered 92 million shares of Baker Hughes from its total stake in Baker Hughes to the public at the price of $23.00 per share. These Class A common shares of Baker Hughes has par value of $0.0001 per share. In addition to this, the company also gave an option to underwriters to purchase additional 9.2 million shares of Baker Hughes in the next 30 days.

This secondary offering of Baker Hughes’ shares is anticipated to consummate on Nov 16, 2018. However, the closing is contingent on the fulfillment of customary closing conditions.

Moreover, General Electric has decided to sell 65 million shares of Baker Hughes, a part of the stake that it currently holds in Baker Hughes, in a private transaction. The buyer of these shares — Class B shares with par value of $0.0001 per share — will be Baker Hughes. Along with this, the company will sell the same number of membership interest of Baker Hughes, a GE company, LLC.

Moreover, number of Class B shares and LLC unit equivalents of option shares that will not be purchased by underwriters will be sold to Baker Hughes.

This share repurchase transaction is anticipated to be worth $1.5 billion and will close on November 16.

Zacks Rank and Stock to Consider

General Electric currently has a market capitalization of $72.4 billion and carries a Zacks Rank #5 (Strong Sell). This conglomerate’s share price has declined 32.3% in the past three months against 8.6% decline recorded by the industry.



On the other hand, conglomerate Macquarie Infrastructure Company (NYSE:MIC) currently sports a Zacks Rank #1 (Strong Buy) while Crane Company (NYSE:CR) carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last 60 days, earnings estimates on Macquarie Infrastructure remained unchanged for 2018 while increased for Crane. Further, the average positive earnings surprise for the last four quarters was 3.85% for Macquarie Infrastructure and 5.04% for Crane.

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General Electric Company (GE): Free Stock Analysis Report

Crane Company (CR): Free Stock Analysis Report

Macquarie Infrastructure Company (MIC): Free Stock Analysis Report

Baker Hughes, a GE company (BHGE): Free Stock Analysis Report

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