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General Electric Company (NYSE:GE) announced Wednesday that it will divest part of its stake of Baker Hughes A GE Co (NYSE:BHGE) and released pricing details.
GE said in a press release that it will sell 115 million shares of Baker Hughes Class A common stock at $21.50 per share to the public. Baker Hughes won't receive any proceeds from the parent company's sale.
In a separate transaction, Baker Hughes confirmed that it agreed to buy from one or more of GE and its affiliates 11.865 million shares of Baker Hughes Class B common stock at a price equal to what the underwriters purchase the Class A common stock at from the stockholders in the offering.
GE, a 50.4% owner of Baker Hughes, will see its ownership stake fall below 40% once the transaction is complete.
As such, GE will need to lower its presence on the Baker Hughes board, and the company confirmed it intends for John Rice, chairman of the GE Gas Power business, to remain on the board.
Lorenzo Simonelli, the chairman, president and CEO of Baker Hughes, and W. Geoffrey Beattie, lead director of Baker Hughes' board, will continue serving on the board, but not as GE designees.
The public offer is expected to close Sept. 16, and underwriters have a 30-day option to buy an incremental 17.25 million shares of the Class A stock.
Baker Hughes shares were trading 1.71% higher at $22.66 at the time of publication Thursday.
GE stock was down by 0.32% at $9.32.
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GE Will No Longer Be Baker Hughes Majority Owner
