BHGE – the first “molecule to megawatt” contracting supermajor
The super-merger of the year so far unites two giants in the service provider space as they embrace the digital revolution
When General Electric announced its merger with Baker Hughes, it signalled the creation of the world’s first “fullstream” service provider.
With a presence in the up, mid and downstream segments, this marriage of multinationals – known as BHGE – has brought together 70,000 employees working across 120 nations.
BHGE is now the second largest oil field services provider in the world, with combined annual revenue of $29.8bn. Schlumberger still dominates the contracting sector, with annual receipts of some $35.5bn.
BHGE projects that its revenue in 2020 will approach the $34bn mark.
Structure and mission
The newly formed BHGE will have four product companies split into 24 individual product lines and segments. The four primary verticals will comprise:
- Oil field services
- Oilfield equipment
- Turbomachinery and process solutions
- Digital solutions
Speaking to the press after the merger was completed, the CEO of BHGE, Lorenzo Simonelli, said: "Disruptive change is the oil and gas industry's new normal. We created BHGE because oil and gas customers need to withstand volatility, work smarter and bring energy to more people.
“Our offering is further differentiated from any other in the industry across the value stream and enables and assists our customers in driving productivity, while minimising costs and risks.”
In 2014, services giant Halliburton began its own negotiation with Baker Hughes to merge the two companies. After 18-months of protracted talks, the takeover bid failed due to regulatory complications.