Summary
General Electric Company (GE) announced the completion of significant divestitures related to its stake in Baker Hughes, a GE company (BHGE). On September 16, 2019, GE sold a substantial portion of its BHGE shares, reducing its ownership from 50.2% to 36.8%. This transaction generated approximately $3.0 billion in net cash proceeds for GE, strengthening its liquidity position. Crucially, this reduction in ownership means GE no longer controls BHGE. Consequently, BHGE's historical financial results will be reclassified as discontinued operations starting in the third quarter of 2019. GE will now account for its remaining investment in BHGE at fair value, with subsequent changes recognized in continuing operations, providing a clearer picture of GE's ongoing business performance.
Key Highlights
- 1GE completed the sale of a significant portion of its stake in Baker Hughes, a GE company (BHGE).
- 2The divestiture resulted in approximately $3.0 billion in net cash proceeds for GE.
- 3GE's ownership in BHGE decreased from 50.2% to 36.8%.
- 4GE no longer holds controlling interest in BHGE.
- 5BHGE's historical financial results will be reported as discontinued operations from Q3 2019 onwards.
- 6GE will account for its remaining BHGE investment at fair value, with gains/losses recognized in continuing operations.
- 7Unaudited pro forma financial information related to the BHGE sale transactions is included as an exhibit.