Davis Polk Advises Baker Hughes, a GE company on a Series of Long-Term Agreements to Maximize Value, Secondary Offering of 92,000,000 Shares of Class A Common Stock and Stock Repurchase
11/13/2018

Davis Polk is advising Baker Hughes, a GE company on a series of long-term agreements that amend the commercial and technological relationships with General Electric Company. Under the terms of the agreements, BHGE has defined the parameters for long-term collaboration and partnership with GE on critical rotating equipment technology; BHGE and GE Digital have agreed to extend their exclusive supplier relationship for digital oil and gas applications; and BHGE and GE agreed on a release from the lock-up restrictions under their stockholders agreement that previously prevented GE from disposing of shares of BHGE common stock until July 2019.

Davis Polk is also advising BHGE in connection with GE’s secondary offering of 92,000,000 shares of BHGE Class A common stock. Morgan Stanley and J.P. Morgan are acting as joint lead book-running managers for the offering. Citigroup and Goldman Sachs & Co. LLC are acting as joint book-running managers for the offering.

In addition, BHGE has agreed to repurchase from one or more of GE and its affiliates, in a privately negotiated transaction, (a) 65,000,000 shares of BHGE Class B common stock, together with an equal number of associated membership interests of Baker Hughes, a GE company, LLC (the “LLC units”) and (b) a number of shares of Class B common stock, together with an equal number of associated LLC units, corresponding to the number of option shares not purchased by the underwriters pursuant to the option (together, the “share repurchase”), in each case at a price equal to the price per share at which the underwriters will purchase shares of Class A common stock from GE in the offering. The maximum aggregate purchase price for the share repurchase is $1.5 billion.

BHGE is a full-stream provider of integrated oilfield products, services and digital solutions. GE combines world-class engineering with software and analytics to help the world work more efficiently, reliably and safely.

The Davis Polk corporate team includes partners George R. Bason Jr., Arthur F. Golden and Michael Davis and associates Laura C. Turano and Julian Azran. Partner Shane Tintle and associate Cameron C. Lewis are providing capital markets advice. Partner Frank J. Azzopardi, counsel Matthew J. Bacal and associate Jason J. Bang are providing intellectual property and technology advice. Members of the Davis Polk team are based in the New York and Northern California offices.