* Baker Hughes to pay 16 pct premium
* Baker Hughes sees savings of $75 mln in 2010
* Baker Hughes sees deal adding to 2011 EPS
* Baker Hughes shares down 3 pct in thin trade
* BJ Services up 11 percent in thin trade. (Adds details, background thoughout)
NEW YORK, Aug 31 (Reuters) - Baker Hughes Inc
The deal values BJ at a 16 percent premium over its closing price on Friday, the companies said.
Lower oil and gas prices have hammered the industry, with
both companies, as well as industry leaders Schlumberger Ltd
BJ Services stockholders will receive 0.40035 shares of Baker Hughes and $2.69 in cash for each share of BJ Services, which totals $17.94 a share based on Friday's closing price. BJ Services shares were trading at $17.20, up 11 percent, in thin premarket trading. Baker Hughes shares were down 3 percent.
Baker Hughes and BJ Services' combined market
capitalization will be about $16.3 billion, putting it ahead of
National Oilwell Varco Inc
The deal "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," said Chad Deaton, Baker Hughes chairman, president and chief executive officer.
In the spring, analysts at Goldman Sachs and Citigroup raised ratings and stock price targets on the sector, citing stabilizing oil prices and the prospects for a return to growth on the horizon.
Baker Hughes expects annual cost savings of about $75 million in 2010 and $150 million in 2011. It expects the deal to add to earnings per share in 2011.
Baker Hughes shares closed at $38.09 Friday on the New York Stock Exchange. (Reporting by Christopher Kaufman in New York and Adveith Nair in Bangalore; Editing by Derek Caney)