Coverage: GE wants Baker Hughes for $30 billion

The merger and acquisition frenzy continued Thursday with news that General Electric Co. wants to pay $30 billion for Baker Hughes Inc.

Dana Mattioli, Kate Linebaugh and Joann Lublin of The Wall Street Journal had the news:

GE has approached the oil-field services company about a takeover, the people said, but details of the talks couldn’t be learned, and the talks could fall apart before an agreement is reached.

With a market value of $23 billion, Houston-based Baker Hughes could go for more than $30 billion in a takeover, given the typical premium. GE has a market value of $259 billion.

In 2014, Baker Hughes agreed to sell itself to rival Halliburton Co. for $35 billion, or $78.62 per share. Earlier this year, the Justice Department filed a lawsuit to block the proposed merger, and the deal fell apart.

Baker Hughes shares closed Thursday at $54.55.

Alwyn Scott of Reuters reported that the two companies were simply discussing partnerships:

“While nothing is concluded, none of these options include an outright purchase,” GE said in a statement.

Baker Hughes shares, which had jumped nearly 14 percent in extended trading after the Wall Street Journal had reported that General Electric was in talks to buy the company, pared some gains and were up about 7 percent.

GE shares were down 0.2 percent at $28.56.

The Journal had reported that GE has approached Baker Hughes about a takeover. (on.wsj.com/2eShzj0)

The deal would be large even for GE, roughly double the size of its $13 billion acquisition of power assets from Alstom last year.

Baker Hughes, which has a market capitalization of $23.1 billion, declined to comment.

GE has approached Baker Hughes to discuss the possibility of an acquisition, according to a person familiar with the matter told Reuters.

Rick Clough and David Wethe of Bloomberg News said the talks were due to the oil industry slump:

A Baker Hughes-GE partnership would begin to compete better with the world’s top oilfield services provider Schlumberger Ltd., which recently bought oilfield equipment maker Cameron International, Richard Spears, vice president at the Tulsa-based oilfield consultant Spears & Associates, said Thursday in a phone interview.

Earlier Thursday, the Wall Street Journal reported that GE was in talks to buy Baker Hughes, citing people familiar with the matter.

GE has expanded its oil and gas business in recent years through more than $10 billion in acquisitions, making it the company’s fourth-largest division. Yet, within the world of oilfield services and equipment manufacturing, the company ranked 11th, according to April data from Spears & Associates.

Baker Hughes jumped as much as 19 percent in after-hours trading in New York following the report and was 6.3 percent higher at 7:35 p.m.