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Baker Hughes (BKR) Closes Subsea Drilling Merger, Forms HMH
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Baker Hughes Company (BKR - Free Report) recently announced the completion of the merger of the Subsea Drilling Systems (SDS) business with Norwegian Akastor’s affiliate, MHWirth AS. The new company is named HMH and will provide offshore drilling equipment to the global market.
The move enables the companies to offer their clients a wide range of offshore drilling equipment and services. It is a 50-50 joint venture (JV) with strong financial and integrated delivery capabilities. Operations of the JV will be managed from Houston and Kristiansand in Norway, with the headquarters located in Amsterdam.
The closing of the deal is within the scheduled time. The company expects a more balanced market by next year. While 2021 is witnessing vaccine rollouts, economic recoveries and mounting energy demand, energy investments will likely grow in the coming days. The SDS business of Baker Hughes — one of the world’s largest oilfield service providers — has service and manufacturing facilities in 11 nations.
Both oil and natural gas prices crossed the multi-year high levels in recent times as rising demand and inadequate supply are choking the market. Higher commodity prices are boosting the earnings of oil and gas companies like ConocoPhillips (COP - Free Report) , EOG Resources, Inc. (EOG - Free Report) , and others. As such, upstream capital spending is soon expected to increase all around the world. This means that the demand for Baker Hughes and the newly formed JV’s services is expected to grow.
Mergers and acquisitions in the energy spectrum have rapidly increased since coronavirus-induced demand destruction started wrecking the market. Several companies looking for more efficiency in operations and higher market reach teamed up with some of their peers. The mergers & acquisitions trend witnessed in the upstream sector during this period is especially remarkable. Recently, the amalgamation of Cabot Oil & Gas (a natural gas operator in the Appalachian Marcellus shale basin) and Cimarex — which primarily drills for oil in the Permian and Anadarko basins — formed an upstream giant named Coterra Energy Inc. (CTRA - Free Report) .
Per the deal announced in March, Baker Hughes is expected to have received $200 million in consideration, of which $120 million is supposed to be paid in cash during closing. The move signifies the company’s value-generating capabilities from assets during challenging times. Via its equity method, profits from the JV will reflect on Baker Hughes’ overall results.
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Baker Hughes (BKR) Closes Subsea Drilling Merger, Forms HMH
Baker Hughes Company (BKR - Free Report) recently announced the completion of the merger of the Subsea Drilling Systems (SDS) business with Norwegian Akastor’s affiliate, MHWirth AS. The new company is named HMH and will provide offshore drilling equipment to the global market.
The move enables the companies to offer their clients a wide range of offshore drilling equipment and services. It is a 50-50 joint venture (JV) with strong financial and integrated delivery capabilities. Operations of the JV will be managed from Houston and Kristiansand in Norway, with the headquarters located in Amsterdam.
The closing of the deal is within the scheduled time. The company expects a more balanced market by next year. While 2021 is witnessing vaccine rollouts, economic recoveries and mounting energy demand, energy investments will likely grow in the coming days. The SDS business of Baker Hughes — one of the world’s largest oilfield service providers — has service and manufacturing facilities in 11 nations.
Both oil and natural gas prices crossed the multi-year high levels in recent times as rising demand and inadequate supply are choking the market. Higher commodity prices are boosting the earnings of oil and gas companies like ConocoPhillips (COP - Free Report) , EOG Resources, Inc. (EOG - Free Report) , and others. As such, upstream capital spending is soon expected to increase all around the world. This means that the demand for Baker Hughes and the newly formed JV’s services is expected to grow.
Mergers and acquisitions in the energy spectrum have rapidly increased since coronavirus-induced demand destruction started wrecking the market. Several companies looking for more efficiency in operations and higher market reach teamed up with some of their peers. The mergers & acquisitions trend witnessed in the upstream sector during this period is especially remarkable. Recently, the amalgamation of Cabot Oil & Gas (a natural gas operator in the Appalachian Marcellus shale basin) and Cimarex — which primarily drills for oil in the Permian and Anadarko basins — formed an upstream giant named Coterra Energy Inc. (CTRA - Free Report) .
Per the deal announced in March, Baker Hughes is expected to have received $200 million in consideration, of which $120 million is supposed to be paid in cash during closing. The move signifies the company’s value-generating capabilities from assets during challenging times. Via its equity method, profits from the JV will reflect on Baker Hughes’ overall results.