MERGER & ACQUISITION IN OIL AND GAS SERVICES THE ACQUISITION OF BAKER HUGHES BY GE OIL & GAS

• Main Author: KUSUMA DEWI (NIM 29115369), LINDA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/22909
• Institution: Institut Teknologi Bandung

Oil and gas equipment and services ‘demand is global. This resulting these services sensitive <br /> <br /> <br /> to the economic and political environment of each country in which Oil Services Company <br /> <br /> <br /> do business. As a result of global oil price declining for the last two years, most Oil and Gas <br /> <br /> <br /> Company, including GE Oil & Gas, are experiencing financial difficulty as well as negative <br /> <br /> <br /> growth rate. The global industry landscape also changing. Oil projects have become larger in <br /> <br /> <br /> size, more complex, and require more advanced technology. Customers (Oil Company) need <br /> <br /> <br /> partners who can help them to produce these reservoirs in as efficiently as possible. <br /> <br /> <br /> <br /> This research is about GE strategy on expanding the oil and gas business segment through <br /> <br /> <br /> acquisition. Motivations of the merger or acquisitions in most industry including oil & gas <br /> <br /> <br /> are to acquire technology, valuable assets, and also operational competence. One of the <br /> <br /> <br /> reasons for this motive is because this is viewed as a rapid, often less-expensive and surely <br /> <br /> <br /> less time-consuming entry strategy especially when companies try to pursue new markets. <br /> <br /> <br /> GE Oil & Gas from the initial formed has been practicing acquisition and merger to expand <br /> <br /> <br /> its business and this has been proven to be the right strategy choice for the company. <br /> <br /> <br /> <br /> With the recent Oil & Gas Business Segment issues that GE faced, which are the significant <br /> <br /> <br /> revenue decline as well as the lack of GE’s portfolio in the upstream segment, the latest GE <br /> <br /> <br /> plan on expanding its oil and gas business is by entering the Oil Field Services sector (OFS). <br /> <br /> <br /> OFS segment is the broadest segment in the oil and gas business; covering almost the whole <br /> <br /> <br /> value chain of oil and capture the biggest market in the industry. The segment also required <br /> <br /> <br /> high technology solution. High technology as well as high capital requirements are one of the <br /> <br /> <br /> reasons why number of players in this segment is very limited. GE plan to combine their oil <br /> <br /> <br /> and gas business with Baker Hughes (subject to Regulatory Approval) is considered the right <br /> <br /> <br /> strategy to compete in the current oil & gas climate. By combining the business with Baker Hughes, GE Oil & Gas not only entering the Oil Field <br /> <br /> <br /> Sector but also the combined company will create 24 billion revenue and overtake <br /> <br /> <br /> Halliburton position as the second largest and will have bigger and more efficient operation <br /> <br /> <br /> that created thru synergy.