Offshore staff
(Houston)- Baker Hughes Incorporated has signed an agreement to sell its 30% minority interest in WesternGeco, a seismic venture jointly owned with Schlumberger Ltd., to Schlumberger for $2.4 billion in cash.
The sale has been approved by Baker Hughes' board of directors and is expected to be completed by the end of April 2006. Baker Hughes expects to record a pre-tax gain of approximately $1.74 billion (approximately $1.05 billion, net of tax), subject to normal closing adjustments. Cash proceeds, net of tax, are expected to be approximately $1.8 billion. Baker Hughes was advised by Goldman, Sachs & Co.
The company plans to use the net cash proceeds to repurchase stock. The company also announced that its board of directors has increased its stock repurchase authorization by $1.8 billion.
Commenting on the sale, Chad Deaton, Baker Hughes' chairman and CEO said, "We have been pleased with the results from WesternGeco over the last several quarters and with the performance of the WesternGeco management team. However, the $2.4 billion sales price provides us with an excellent point to exit our minority ownership position."
Deaton continues, "We remain excited about the growth in the global market for our products and services that we see continuing for the next several years. Baker Hughes will continue investing in people and technology to further our penetration of key global markets, and we maintain our intention to return cash in excess of our needs to our stockholders through our stock repurchase program."
4/21/2006
