Baker Hughes Inc.'s North American cementing and hydraulic fracturing operations will become part of a new company operating under the BJ Services brand and majority-owned by two private-equity investors.
CSL Capital Management and West Street Energy Partners will contribute $325 million in cash, with $175 million slated for the new company's balance sheet and $150 million going to Baker Hughes.
CSL's Allied Energy Services platform will become part of the new entity.
Houston firm CSL and West Street, a fund affiliated with Goldman Sachs Group Inc., will own 53.3% of BJ Services, while Baker Hughes will hold 46.7%.
Baker Hughes said the move is in line with its asset-light strategy and will enable the company to participate in the land pressure pumping market while "reducing capital intensity."
The oil-field services company is retaining its international pressure pumping businesses and its Gulf of Mexico offshore pressure pumping operations.
Baker Hughes bought BJ Services Co. for $5.5 billion in 2010.
Allied Energy Services Chief Executive Warren Zemlak will be CEO of BJ Services.
As the industry suffered from a severe pricing downturn, Baker Hughes planned to sell itself to Halliburton Co. for $35 billion. After that combination was called off amid regulatory opposition, the company announced another big transaction on Oct. 31. General Electric Co. plans to combine its oil-and-gas unit with Baker Hughes. GE will own almost two-thirds of the new Baker Hughes and include its results in GE's financial reports while paying Baker Hughes shareholders a $7.4 billion cash dividend.
Baker Hughes shares were down 48 cents at $60 in after-hours trading Tuesday.
Write to Josh Beckerman at email@example.com
(END) Dow Jones Newswires
November 29, 2016 17:55 ET (22:55 GMT)
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