Baker Hughes' $13.6B Acquisition of Chart Industries Awaiting EU Decision
Written by Emily J. Thompson, Senior Investment Analyst
0mins
Source: Newsfilter
Baker Hughes Co's stock fell 5.87% as it crossed below the 5-day SMA amid broader market weakness, with the Nasdaq-100 down 0.37% and the S&P 500 down 0.01%.
The company is awaiting a decision from EU antitrust regulators regarding its $13.6 billion acquisition of Chart Industries, which aims to enhance its services in liquefied natural gas and data centers. The decision is expected by June 26, and if approved, it could significantly strengthen Baker Hughes' position in the liquefied natural gas market, although it may also raise concerns about industry consolidation.
The outcome of this acquisition could have substantial implications for Baker Hughes, potentially positioning it more competitively in a growing market while navigating regulatory scrutiny.
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Analyst Views on BKR
Wall Street analysts forecast BKR stock price to fall
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 64.710
Low
52.00
Averages
61.54
High
67.00
Current: 64.710
Low
52.00
Averages
61.54
High
67.00
About BKR
Baker Hughes Company is an energy technology company that provides solutions to energy and industrial customers worldwide. The Company's segments include Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET). OFSE segment provides products and services for onshore and offshore oilfield operations across the lifecycle of a well, ranging from exploration, appraisal, and development, to production, rejuvenation, and decommissioning. OFSE segment is organized into four product lines: Well Construction; Completions, Intervention, and Measurements; Production Solutions, and Subsea. IET segment provides technology solutions and services for mechanical-drive, compression and power-generation applications across the energy industry including oil and gas, liquefied natural gas operations, downstream refining, and petrochemical markets, as well as lower carbon solutions to broader energy and industrial sectors. IET segment also provides equipment, software, and services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Technology Utilization: Under the integrated drilling and well services contract, Baker Hughes will leverage its capabilities across Well Construction, Intervention, and Measurement businesses to support development on the Norwegian continental shelf, utilizing advanced technologies such as the Kantori autonomous well-construction solution and TRU-ARMS advanced reservoir-mapping services.
- Emission Reduction Goals: The wireline intervention contract will focus on Baker Hughes' PRIME Technology Platform, integrating surface and downhole solutions with complementary technologies from service partners to sustain production and reduce emissions in the North Sea.
- Industry Impact: Baker Hughes has played a significant role in Norway's energy sector for decades, having recently opened a new Subsea Services Center of Excellence and manufacturing plant in Dusavik, while also operating a Center of Excellence for Plug & Abandonment in Stavanger, further solidifying its market position.
See More
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- Technology Utilization: Under the integrated drilling and well services contract, Baker Hughes intends to leverage its capabilities across Well Construction, Completions, Intervention, and Measurement to support energy development in Norway, enhancing service efficiency.
- Intervention Service Expansion: The intervention contract will see Baker Hughes expand the scope of service delivery centered around the PRIME Technology Platform, aiming to increase flexibility and responsiveness in technology applications.
- Energy Security Goals: Through these contracts, Baker Hughes aims to create a more secure energy future for Norway and all of Europe, reflecting its strategic commitment to sustainable energy solutions.
See More
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- Technology Implementation: Under the integrated drilling and well services contract, Baker Hughes will leverage advanced technologies such as the Kantori™ autonomous well construction solution and TRU-ARMS™ advanced reservoir mapping services to enhance resource development efficiency on the Norwegian continental shelf, thereby driving business growth.
- Intervention Services Expansion: The intervention contract will see Baker Hughes provide fully integrated intervention services that combine surface and downhole solutions aimed at extending the life and performance of existing wells in the North Sea, further optimizing production and reducing emissions.
- Industry Leadership: Baker Hughes solidifies its key role in Norway's energy sector, with the opening of its new Subsea Services Center of Excellence and manufacturing plant in Dusavik, the company continues to drive energy security for Norway and all of Europe.
See More
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- Mortgage Application Decline: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index down 18.1%, reflecting the dampening effect of high interest rates on housing demand, as the average 30-year fixed mortgage rate rose to 6.65%.
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See More
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- Capex Cuts: The sharp drop in oil prices leads producers to quickly slash their capital expenditure budgets, which directly impacts revenue for oilfield service companies like Baker Hughes, with significant revenue declines expected in the next two quarters.
- Market Reaction: Despite Baker Hughes's low volatility, with only six moves greater than 5% in the past year, today's drop suggests that the market considers the news significant, potentially affecting investors' long-term perceptions of the company.
- Investment Returns: Although Baker Hughes has risen 34.3% since the beginning of the year, its current price is still 9.2% below its 52-week high, presenting potential buying opportunities for investors, especially considering a 160% return for those who invested five years ago.
See More
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- Impact of Falling Oil Prices: Crude oil prices dropped over 3% amid optimism for a normalization of oil flows from the Middle East, which not only eased inflation expectations but also pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, positively affecting the bond market.
- Decline in Mortgage Applications: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index plunging 18.1%, indicating the suppressive effect of high interest rates on the housing market.
- Corporate Earnings Overview: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with overall earnings projected to rise by 12% year-on-year, but excluding the tech sector, the growth is only 3%, highlighting disparities across industries.
See More
Baker Hughes Secures Contract Extensions with Equinor
- Contract Extensions: Baker Hughes (BKR) rose 1.9% in Thursday's trading after announcing two contract extensions with Equinor (EQNR) to provide integrated drilling and well services solutions, with financial terms undisclosed.
- Technology Utilization: Under the integrated drilling and well services contract, Baker Hughes will leverage its capabilities across Well Construction, Intervention, and Measurement businesses to support development on the Norwegian continental shelf, utilizing advanced technologies such as the Kantori autonomous well-construction solution and TRU-ARMS advanced reservoir-mapping services.
- Emission Reduction Goals: The wireline intervention contract will focus on Baker Hughes' PRIME Technology Platform, integrating surface and downhole solutions with complementary technologies from service partners to sustain production and reduce emissions in the North Sea.
- Industry Impact: Baker Hughes has played a significant role in Norway's energy sector for decades, having recently opened a new Subsea Services Center of Excellence and manufacturing plant in Dusavik, while also operating a Center of Excellence for Plug & Abandonment in Stavanger, further solidifying its market position.
See More
Baker Hughes Extends Contracts with Equinor for Drilling Services
- Contract Extensions: Baker Hughes has announced two contract extensions with Equinor, aimed at providing integrated drilling and well services solutions, thereby reinforcing its market position on the Norwegian continental shelf.
- Technology Utilization: Under the integrated drilling and well services contract, Baker Hughes intends to leverage its capabilities across Well Construction, Completions, Intervention, and Measurement to support energy development in Norway, enhancing service efficiency.
- Intervention Service Expansion: The intervention contract will see Baker Hughes expand the scope of service delivery centered around the PRIME Technology Platform, aiming to increase flexibility and responsiveness in technology applications.
- Energy Security Goals: Through these contracts, Baker Hughes aims to create a more secure energy future for Norway and all of Europe, reflecting its strategic commitment to sustainable energy solutions.
See More
Baker Hughes Extends Contracts with Equinor for Offshore Services
- Contract Extensions: Baker Hughes has signed two significant multi-year contracts with Equinor to provide integrated drilling and well services solutions, supporting offshore hydrocarbon production goals in the North Sea, demonstrating the company's ongoing influence in marine energy development.
- Technology Implementation: Under the integrated drilling and well services contract, Baker Hughes will leverage advanced technologies such as the Kantori™ autonomous well construction solution and TRU-ARMS™ advanced reservoir mapping services to enhance resource development efficiency on the Norwegian continental shelf, thereby driving business growth.
- Intervention Services Expansion: The intervention contract will see Baker Hughes provide fully integrated intervention services that combine surface and downhole solutions aimed at extending the life and performance of existing wells in the North Sea, further optimizing production and reducing emissions.
- Industry Leadership: Baker Hughes solidifies its key role in Norway's energy sector, with the opening of its new Subsea Services Center of Excellence and manufacturing plant in Dusavik, the company continues to drive energy security for Norway and all of Europe.
See More
Mixed Close for US Stocks as Oil Prices Plunge
- Market Performance: On Wednesday, the S&P 500 Index rose by 0.02%, the Dow Jones Industrial Average increased by 0.36% to a new record high, while the Nasdaq 100 fell by 0.09%, indicating a divergence in market sentiment amid enthusiasm for artificial intelligence and declining oil prices.
- Oil Price Fluctuations: Crude oil prices plummeted over 5% to a five-week low due to optimism surrounding a US-Iran peace deal, which eased inflation expectations and pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, providing support for the bond market.
- Mortgage Application Decline: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index down 18.1%, reflecting the dampening effect of high interest rates on housing demand, as the average 30-year fixed mortgage rate rose to 6.65%.
- Corporate Earnings Outlook: As of Wednesday, 83% of the 475 S&P 500 companies that reported Q1 earnings exceeded expectations, with projected earnings growth of 12% year-over-year, but excluding the technology sector, the growth is only 3%, indicating signs of overall earnings weakness.
See More
Baker Hughes Shares Drop Due to Falling Oil Prices
- Stock Decline: Baker Hughes (BKR) shares fell 5.5% in the morning session, primarily driven by a plunge in West Texas Intermediate (WTI) crude oil prices due to progress in the Iran-US peace deal, indicating market sensitivity to oil price fluctuations.
- Capex Cuts: The sharp drop in oil prices leads producers to quickly slash their capital expenditure budgets, which directly impacts revenue for oilfield service companies like Baker Hughes, with significant revenue declines expected in the next two quarters.
- Market Reaction: Despite Baker Hughes's low volatility, with only six moves greater than 5% in the past year, today's drop suggests that the market considers the news significant, potentially affecting investors' long-term perceptions of the company.
- Investment Returns: Although Baker Hughes has risen 34.3% since the beginning of the year, its current price is still 9.2% below its 52-week high, presenting potential buying opportunities for investors, especially considering a 160% return for those who invested five years ago.
See More
Mixed US Stock Market with Energy Stocks Under Pressure
- Divergent Market Performance: The S&P 500 index fell by 0.07% while the Dow Jones Industrial Average rose by 0.54%, indicating a divergence in market trends, particularly with the Dow reaching a new high, reflecting increased investor confidence in certain sectors.
- Impact of Falling Oil Prices: Crude oil prices dropped over 3% amid optimism for a normalization of oil flows from the Middle East, which not only eased inflation expectations but also pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, positively affecting the bond market.
- Decline in Mortgage Applications: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index plunging 18.1%, indicating the suppressive effect of high interest rates on the housing market.
- Corporate Earnings Overview: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with overall earnings projected to rise by 12% year-on-year, but excluding the tech sector, the growth is only 3%, highlighting disparities across industries.
See More
