General Electric CompanyNYSE
Wed, Nov. 30, 10:47 AM| Wed, Nov. 30, 10:47 AM | 15 Comments
Tue, Nov. 15, 7:57 AM
- General Electric (NYSE:GE) is acquiring Bit Stew Systems for $153M, The Globe and Mail reports.
- The Vancouver-based startup, which has more than doubled in size in each of the past two years, is on track to generate roughly $15M in revenue this year, according to industry experts.
- GE said it will incorporate Bit Stew's technology into its existing operating system for industrial Internet applications.
Mon, Nov. 14, 2:15 PM
- General Electric's (GE -0.6%) Digital unit says it agreed to buy cloud-based field service management company ServiceMax for $915M, as part of its strategy to advance its "Industrial Internet" vision.
- GE says the deal will help it automate and digitize the servicing of heavy-duty machinery.
- GE Digital, established last year, may become a $15B business by 2020, and its Predix operating system has been developed to help run industrial equipment more reliably and efficiently.
Tue, Nov. 8, 2:48 PM
- It's time to buy Baker Hughes (BHI -0.2%) now that the dust has settled regarding the company's merger with General Electric's (GE +0.6%) oil and gas business, Guggenheim analysts say.
- Guggenheim estimates the new company will generate $4.9B in EBITDA in 2018 - a bit less than the $5.2B-$5.5B forecast by the companies - and should trade at a peer average 10.6x EBITDA, implying a fair value for BHI of ~$63, but the firm believes synergies provide another ~$4 of upside if GE is able to realize greater cost savings.
- The firm also finds the industrial logic is sound: As Schlumberger (SLB -0.1%) has shown, regional and product line diversity enhance through-cycle returns and cash flow, which are benefits that the new BHI should be able to realize as a result of its pro forma portfolio.
Mon, Nov. 7, 3:19 PM
- General Electric (GE +2.5%) now contends it is paying $76/share for Baker Hughes (BHI +0.4%), according to an update of its original deal presentation that provides additional subsegment data, a timeline of GE oil and gas history, and its analysis of deal economics.
- GE also raises its pro-forma EBITDA forecast for 2018, now expecting $5.5B in 2018 EBITDA with GE and BHI each contributing $2.4B, $600M in cost synergies and $100M in revenue synergies.
- Evercore ISI analysts think GE will exceed its cost synergy estimate and sees fair value at $62-$67/share on the higher EBITDA estimate.
Mon, Oct. 31, 6:50 PM
- Citigroup analysts believe the deal between General Electric (NYSE:GE) and Baker Hughes (NYSE:BHI) strikes a good balance for GE and BHI, as GE is not selling at the bottom, valuation seems fair for BHI shareholders, and GE management retains control to roll out its digital and service focus across a much broader oil and gas platform.
- Citi views the deal (I, II, III) favorably, as it "reflects deployment of a meaningful portion of the ~$20B in incremental leverage GE had noted as available for transactions over the next few years," but valuation is reasonable and "the deal enhances [GE]’s visibility to EPS growth over the next several years."
- The firm also notes BHI’s weak stock showing, likely given concerns that GE’s "non-cash contribution to the deal (in the form of 37.5% of GE oil and gas) doesn’t provide enough value to Baker Hughes shareholders – we think that concern will diminish over time" given the improved competitive and cost position of the combined company.
- Simmons analyst Bill Herbert cites another likely reason for BHI's 6.3% swoon in today's trade: The new partnership leaves the company more leveraged to deepwater and international projects, which are not as flexible as the U.S. onshore business.
Mon, Oct. 31, 3:27 PM
- Almost as an afterthought in unveiling the merger of its oil and gas unit with Baker Hughes, General Electric (GE -0.1%) said it would sell its GE Water business, a move WSJ's Spencer Jakab calls "self-preservation."
- Both the water and the oil and gas businesses have been disappointing for GE, Jakab writes, but dumping the water business may be a matter of the number of losers that CEO Jeffrey Immelt can justify to activists such as Trian Fund: "Water might have paid off in the long run... but with GE raising its bet on oil, water just didn’t fit into the mix."
- Elsewhere, Bernstein analyst Steven Winoker says the deal with Baker Hughes is “positive strategically” for GE shareholders, and is an attractive structure for GE, noting that without requiring a full cash outlay for BHI, the new company provides GE shareholders with additional upside to an oil price recovery.
- Evercore analysts note the deal likely provides an avenue for GE to promote the widespread adoption of its Predix industrial internet platform, a focal point of the company’s long term strategy.
- Moody’s keeps its A1 credit rating for GE, saying increased exposure in oil and gas initially is credit negative but will pay out over an extended time horizon.
Mon, Oct. 31, 10:30 AM
- Baker Hughes (BHI -1%) erases opening gains to trade in the red, while General Electric (GE +0.9%) is higher amid plans to combine their oil and gas operations.
- The new company will be 62.5% owned by GE, with GE Oil & Gas CEO Lorenzo Simonelli serving as President and CEO; GE will fund a special one-time cash dividend of $17.50/share, or $7.4B, to existing BHI shareholders, who will own 37.5% of the new company.
- The deal creates a company with more than $32B in FY 2015 revenue that could cut costs to better compete with rivals such as Schlumberger (SLB -0.9%) to provide equipment and services to oil rigs and wells; the $32B combined revenue places the new company only 8%-9% behind SLB.
- The combined companies expect to generate $1.6B of synergies by 2020, primarily driven by cost savings; GE expects the deal to be accretive to 2018 EPS by $0.04 and 2020 EPS by $0.08.
- Analysts see a high likelihood of the deal's completion given little product overlap outside of the Artificial Lift business and the relatively smaller size of the deal vs. the rejected Halliburton-Baker Hughes (HAL -0.5%) tie-up.
- Moody’s, Fitch and S&P all affirmed GE’s credit ratings with stable outlooks following the announcement.
Mon, Oct. 31, 6:25 AM
- Banking on a recovery in crude prices, General Electric (NYSE:GE) is merging its oil and gas business with Baker Hughes (NYSE:BHI), creating a large, listed player, that could compete with rivals like Schlumberger (NYSE:SLB).
- GE will own 62.5% of the new company, which will have combined revenue of $32B, while Baker Hughes shareholders will own 37.5% and get a special one-time cash dividend of $17.50 per share after the deal closes (expected in mid-2017).
- GE +1%; BHI +6.6% premarket
Sun, Oct. 30, 10:50 PM
- The roughly $30B deal would see the creation of a new publicly-traded entity comprised of Baker Hughes (NYSE:BHI), GE's oil and gas business, and some cash from GE, reports the WSJ.
- The new company would have more than $25B in annual revenue and thus be of large enough scale to better compete with rivals like Schlumberger (NYSE:SLB).
- The structure of the deal also gives GE control of Baker Hughes without having to shell out for an outright acquisition.
- Previously: WSJ: GE, Baker Hughes could reach deal as soon as next week (Oct. 28)
Fri, Oct. 28, 6:35 PM
- Merger discussions between General Electric (NYSE:GE) and Baker Hughes (NYSE:BHI) are advancing and could result in a deal as early as next week, WSJ reports.
- BHI +1.3% AH after surging 8.4% in today's trade following yesterday's WSJ report on a possible deal in the works; BHI today confirmed through an email to employees that it is in discussions with GE, while GE said late yesterday that the company was pursuing "potential partnerships" with BHI but not an "outright purchase."
- The companies reportedly are negotiating a complicated transaction, perhaps involving merging GE’s oil and gas business with Baker Hughes, which provides oilfield services, and then spinning off the combined business into a new public company.
- Any Reverse Morris Trust deal would allow GE to avoid a big tax bill and allow shareholders to reap any cost savings or other benefits from putting the two businesses together, as well as any upside from a rebound in oil prices.
Thu, Oct. 27, 7:52 PM
- With after-hours trading winding down, Baker Hughes (NYSE:BHI) has given back much of a surge tied to buyout chatter with GE, as GE clarifies that an outright purchase is right out.
- "We are in discussion with Baker Hughes on potential partnerships. While nothing is concluded, none of these options include an outright purchase," GE's Chief Communications Officer Deirdre Latour tells CNBC.
- Baker Hughes had spiked as high as $65.50 (a 20%-plus gain) in late trading, but after the GE clarification, the stock is trading up 6.9% after hours.
Thu, Oct. 27, 6:43 PM
- Baker Hughes (NYSE:BHI) +18.5% AH following a Dow Jones report that General Electric (NYSE:GE) is in talks to buy the company.
- With a $23B market cap, BHI could go for more than $30B in a takeover, given the typical premium, according to the report, which notes that a deal would rank as GE's biggest ever.
- GE reportedly approached BHI about a takeover, but no other details are known.
Thu, Oct. 27, 3:49 AM
- General Electric (NYSE:GE) will pay €549M for a 75% stake in Concept Laser GmbH, after its plan to acquire another German 3-D printing company, SLM Solutions (OTC:SLGRF), fell through earlier this week. It also raised its bid for Arcam (OTCPK:AMAVF) AB to $696M.
- GE and its competitors have begun to invest seriously in additive manufacturing, which produces parts with less work than traditional production methods, generates less scrap material and expands design possibilities.
Tue, Oct. 11, 8:06 AM
- General Electric (NYSE:GE) says it intends to purchase Denmark-based LM Wind Power for $1.65B, in a deal that would in-source wind turbine blade design and manufacturing for its renewable energy business.
- The acquisition "will help sustain growth in the wind power industry," says Jerome Pecresse, head of GE Renewable Energy. "We'll be more local, have more flexibility and knowledge in turbine design and supply, and more ability to innovate and reduce product costs, while improving turbine performance."
- GE values the deal at 8.3x pro forma EBITDA, and expects the deal to be accretive to earnings in 2018.
Wed, Sep. 14, 4:46 PM
- General Electric (NYSE:GE) agrees to acquire the remaining stake in software developer Meridium it does not already own, in a deal valued at $495M, including the 26% stake GE took in 2014.
- GE says the acquisition will enhance its capabilities in technologies that help industrial customers use real-time data to improve their operations, in industries including oil and gas, power and chemicals that complement its current lineup.
- The Meridium deal is the first transaction by GE Digital, which was formed last year.