General Electric in early discussion with Baker Hughes for potential acquisition

Although GE has portrayed this discussion as one related to a partnership, the Wall Street Journal has cited an anonymous source, who’s familiar with the matter at hand, saying the discussions are for a potential acquisition. Reuters has cited a source stating the same thing.

General Electric disclosed on Thursday that it is holding discussions with Baker Hughes, the number three oilfield services provider, for a potential partnership.

“While nothing is concluded, none of these options include an outright purchase,” said GE in a statement.

Earlier, the Wall Street Journal had reported that General Electric was in talks with Baker Hughes for an outright purchase. With this news hitting the market, shares of Baker Hughes jumped nearly 14% in extended trading.

GE shares were down by 0.2% to $28.56.

Baker Hughes, which has a market capitalization of $23.1 billion, declined to comment on the matter.

According to a source who is familiar with the matter at hand, General Electric has approached Baker Hughes to discuss the possibility of an acquisition.

The source went on to clarify it isn’t clear whether Baker Hughes will engage in further talks regarding this deal.

Last week, GE had said it believes the oil market is at its nadir, however there is still demand for infrastructure related equipment, which it thinks will recover after the first half of 2017.

Incidentally, Baker Hughes’ planned merger with Halliburton Co, fell through in May this year due to antitrust concerns. This merger was valued at $34.6 billion.

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