GE had already received the EU’s nod for this deal, it has now won the U.S. Justice Department’s approval as well.
On Monday, the U.S. Justice Department disclosed that it has given the go ahead to General Electric Co acquisition of Baker Hughes Inc. With this move, General Electric has won the U.S. antitrust approval and can go ahead to create a new publicly traded company.
In a statement, both companies have said, under the terms of the agreement, GE will fit merge Baker Hughes with its oil and gas businesses to create a company whose annual turnover will be in excess of $23 billion.
GE will pay existing Baker Hughes’ shareholders $7.4 billion for a special dividend.
The deal between the two was made public in October 2016 following Halliburton’s effort to acquire Baker Hughes, which collapsed under pressure from the Justice Department.
After the news of the approval hit the newsstands, shares of Baker Hughes rose by 1.1% to $56.16.
GE is the world’s largest oilfield equipment manufacturer, from blowout preventers, to compressors and pumps used in exploration and production GE manufactures many accessories in the supply chain.
It has also invested heavily in large data processing services since the oil industry is eyeing a potential boost to oil recovery.
Baker Hughes is seen as one of the world leaders in horizontal drilling, chemicals used to frack and other services key to oil production.
The deal was sanctioned on the condition of GE selling its Water & Process Technologies business, said the Justice Department.
As per a court filing, this divesture was required since Baker Hughes and GE are two of the four companies that sell refineries the specialized chemicals required to remove impurities from hydrocarbons, said the department.
GE will now sell its Water & Process Technologies business to French waste and water group Suez said the company in a statement.
“Today’s milestone represents significant progress toward creating an oil and gas productivity leader,” said the companies in a statement.
The European Union had approved the deal in late May.