Baker Hughes sells 30%stake in WesternGeco
Posted: 24 April 2006
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Houston-based Baker Hughes has signed an agreement to sell its 30% minority interest in WesternGeco, a seismic venture jointly owned with Schlumberger Limited, to Schlumberger for $2.4 billion in cash. The sale is expected to be completed by the end of this month.
Baker Hughes said it expects to record a gain of about $1.05 billion on the sale, subject to adjustments, and receive about $1.8 billion in cash proceeds. It will use the proceeds to buy back stock. The company said its board has increased its repurchase authorization by $1.8 billion.
The deal was advised by Goldman, Sachs & Co.
Chad Deaton, Baker Hughes' chairman and CEO said: "We have been pleased with the results from WesternGeco over the last several quarters and with the performance of the WesternGeco management team. However, the $2.4 billion sales price provides us with an excellent point to exit our minority ownership position.
“We remain excited about the growth in the global market for our products and services that we see continuing for the next several years. Baker Hughes will continue investing in people and technology to further our penetration of key global markets, and we maintain our intention to return cash in excess of our needs to our stockholders through our stock repurchase programme."
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