US conglomerate General Electric (GE) is planning to fully separate its 62.5% interest in oilfield services firm Baker Hughes, a GE company (BHGE) over the next two to three years.
The decision announced by the company is part of a greater strategy to reduce debt and simplify its business.
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It comes after a strategic review and the company will now focus on aviation, power and renewable energy.
The plans, which were approved by GE’s board of directors, also include a proposal to separate GE Healthcare into a standalone company.
GE chairman and CEO John Flannery said: “We are aggressively driving forward as an aviation, power and renewable energy company – three highly complementary businesses poised for future growth.
“We will continue to improve our operations and balance sheet as we make GE simpler and stronger.”
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By GlobalData“We are confident that positioning GE Healthcare and BHGE outside of GE’s current structure is best not only for GE and its owners but also for these businesses, which will strengthen their market-leading positions and enhance their ability to invest for the future while carrying the spirit of GE forward.”
According to the company, the separation of BHGE, which will be pursued in an ‘orderly manner’, will help create a leading oil and gas servicing and equipment company.
The move is expected to provide BHGE with enhanced agility and the ability to focus on becoming a leading business in the oil and gas industry.
Last July, GE merged its oil and gas business with Baker Hughes to create BHGE, whose portfolio includes oilfield services, oilfield equipment, turbomachinery and process solutions, and digital systems.
