GE GE Aerospace

By Thomas Gryta 

General Electric Co. has no intention of selling down its majority stake in oil services firm Baker Hughes before 2019, the company's finance chief said Wednesday, in a shift from its previous exploration of exiting the business.

GE combined its struggling oil and gas business with Baker Hughes last year to form a new public company. As part of a major restructuring of the industrial giant, new Chief Executive John Flannery said in November that he would explore selling the stake before restrictions lift in 2019.

"Given today's valuation levels, we see a lot of upside there," said Chief Financial Officer Jamie Miller at a Barclays conference Wednesday. "At this point in time, we have no intent to change anything or execute prior to the expiration of any of the lockup periods."

Shares of Baker Hughes jumped on the news, recently trading up 4.5% to $27.61. The company has a market value of about $30 billion. GE owns about two-thirds of the company.

Since taking the reins as CEO in August, Mr. Flannery has cut the dividend and financial projections while pledging to shed at least $20 billion in assets. Mr. Flannery says he wants to simplify the company and is also considering bigger moves including separating the core divisions -- health care, aviation and power -- in what would amount to a breakup of the industrial giant.

GE is working on more than 20 deals to rearrange its portfolio of businesses. It expects to cut costs by more than $2 billion in 2018 -- more than the $1.7 billion cut in 2017 -- and will soon announce a revamped board of directors.

Write to Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

February 21, 2018 12:51 ET (17:51 GMT)

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