E+H acquires Blue Ocean Nova

A new Endress+Hauser press release says the company is further expanding its portfolio of products, solutions and services in the field of process analytical measurement, by  acquiring Blue Ocean Nova AG, a manufacturer of innovative inline spectrometers for monitoring quality-relevant process parameters. 

Blue Ocean Nova will operate under the umbrella of the Endress+Hauser centre of competence for liquid analysis headquartered in Gerlingen, Germany: the 15 employees currently located in Aalen, Germany will be retained. “The intelligent process sensors developed by Blue Ocean Nova will enhance our offering in the field of process analytical measurement, adding a strategic building block,” said Dr Manfred Jagiella, Managing Director of Endress+Hauser Conducta GmbH+Co. KG. As a member of the Group’s Executive Board he is also responsible for the analytics business. 

Innovative concept

EH_blue_ocean_nova

The process sensors developed by Blue Ocean Nova cover the relevant optical spectroscopy regions of UV-VIS, NIR and MIR to analyze liquids, gases and solids inline. The innovative technology allows the spectrometer to be directly integrated into the measurement probe, even in explosion-hazardous areas. The sensors can furthermore be automatically cleaned and easily integrated into process control systems.

The systems from Blue Ocean Nova are utilized in the food & beverage, oil & gas, chemicals and life sciences industries for applications such as concentration and moisture measurements and for measuring relevant quality parameters. The technology enhances the Group’s portfolio, which already encompasses Raman spectroscopy, tunable diode laser absorption spectroscopy (TDLAS) and process photometers.

Extensive experience

Blue Ocean Nova was founded by Joachim Mannhardt and Stefan Beck in 2015, bringing extensive product development experience in the field of industrial spectroscopy and process analytical measurements to the company. “Endress+Hauser opens the door to international markets and customers for us,” explains Stefan Beck. Joachim Mannhardt adds: “We’re convinced that our technology will be an ideal enhancement to Endress+Hauser’s optical portfolio.”

Endress+Hauser acquired Blue Ocean Nova effective 31 October 2017. Both parties agreed not to disclose the details of the transaction. Joachim Mannhardt and Stefan Beck will remain on the management team of the innovative company. “With this acquisition, we are continuing to pursue our strategy of strengthening the process analytical measurement portfolio and in the future supporting our customers from the lab to process,” says Manfred Jagiella.

 

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Yokogawa acquires FluidCom chemical injection valve technology

Yokogawa has announced the acquisition of TechInvent2 AS, a Norwegian enterprise
that holds the rights to FluidCom, a chemical injection metering valve (CIMV). The FluidCom CIMV prevents blockages and corrosion in oil wells, pipelines, and other facilities and employs a patented technology for thermal control. It incorporates the functions of a mass flowmeter, control valve, and valve controller and has very few moving parts. FluidCom systems have already been delivered to several international oil and gas majors. With TechInvent2 joining the Yokogawa Group, Yokogawa will now target delivery of this solution to the oil and gas upstream and midstream sectors, thereby helping to improve operational efficiency, reduce operational costs, and enhance health, safety and the environment (HSE).

Background Information

Based on its Transformation 2017 mid-term business plan, Yokogawa will continue to focus on the oil and gas industries, and will strive to strengthen its solutions targeting the upstream and midstream sectors, in addition to its forte downstream sector businesses.

Following its April 2016 acquisition of KBC Advanced Technologies, a provider of consulting services that are based on its own advanced oil and gas simulation technologies, the company has been striving to work with its customers to create
value through the provision of solutions that address every aspect of their business activities. At oil wells and pipelines, efforts to ensure a secure oil flow path (flow assurance) play an important role in maintaining production efficiency. The adherence of various chemical substances to the inside walls of a pipe can reduces its internal diameter and causes corrosion. To prevent the accumulation of substances and corrosion, certain chemicals must be injected in the pipes. Improving the efficiency of this process is a major challenge in the upstream and midstream sectors.

The FluidCom CIMV

FluidCom

Chemical injection valves have traditionally been manually operated in the upstream sector, although there are cases where chemical injection has been automated using an actuated solution. In the former case, the valves must be frequently opened, closed, and adjusted by plant personnel. This is costly as it necessitates the hiring of additional staff, and it is work that must be done under very harsh environmental conditions in the field.

It is also a well-known problem that inaccurate and unstable dosing of chemicals leads to additional operational costs and challenges with specific processes. To address and resolve such problems, there is an increasing demand for integrated automatic injection solutions that perform stably and offer a high level of precision in the dosing. The FluidCom CIMV has a unique design which is based on a patented technology, providing integrated flow control and metering using a unique combination of material and thermal effects.

FluidCom is a fully automated and reliable device with a simple design that performs autonomous valve control and continuous flow metering. The device is able to stably inject chemicals in the required small amounts. It has few moving parts and has proven to be an accurate, reliable solution for the control of chemical injection applications. No regular maintenance is required and remote control features are provided.

The device features a self-cleaning mechanism that reduces maintenance workload, and the automatic injection of chemicals in the correct amounts eliminates the need for manual interventions by plant operators and maintenance workers, thereby enabling personnel to lessen their exposure to harsh environmental conditions in the field.

Chemical injection valves have traditionally been operated as manual systems in the upstream sector under harsh conditions. The FluidCom can automate chemical injection operation and reduce times that plant operators and maintenance workers go to field and operate in harsh environments. So using FuidCom improves healthy and safety.

FluidCom is also a valuable solution for downstream operations, where corrosion prevention is always a pressing concern. An ISA100 Wireless version is planned. The ISA100 Wireless technology is based on the ISA100.11a standard. It includes ISA100.11a-2011 communications, an application layer with process control industry standard objects, device descriptions and capabilities, a gateway interface, infrared provisioning, and a backbone router.

Commenting on the acquisition of this company, Shigeyoshi Uehara, head of the Yokogawa IA Products and Service Business Headquarters, said: “FluidCom will improve flow assurance, which is a key concern of our customers in the oil and gas industry, and it will make a major contribution to their operations by helping them not only improve production efficiency and reduce operational costs, but also enhance HSE. The combination of FluidCom, KBC simulation technology, and Yokogawa field devices will allow us to expand the range of our upstream and midstream solutions and enable the delivery of value in new ways to our customers.”

About TechInvent2

TechInvent2 is a fully owned subsidiary of TechInvent AS, a Stavanger, Norway-based company founded in 2008. TechInvent is owned by the founder and CEO Alf Egil Stensen, the venture capital firm Statoil Technology Invest AS, Aarbakke Innovation AS, and Ipark AS. The company has been supplying its FluidCom chemical injection technology to major oil companies since 2016. Alf Egil Stensen will continue as CEO of the company now that it is part of Yokogawa.

Nidec grows its Motor business

Nidec, based in Kyoto, Japan, has expanded rapidly by acquiring many of the world’s major manufacturers of motors, large and small. Established in 1973 by the current CEO and Chairman Shigenobu Nagamori, now a 71 year old billionaire, and three colleagues, they had the objective of “becoming the World’s No. 1”, and designed small precision motors (fractional HP motors for small fans). In 1979, Nidec became the first company in the world to successfully commercialize a direct drive spindle motor for HDDs that used a brushless DC motor. Nidec subsequently established a position as the world’s biggest maker of precision motors for hard-disk drives, acquiring part of the Seagate Corporation in Thailand, and achieving a claimed market share of around 80%. Based on this success, between 1989 and 2007 Nidec invested in the acquisition of 27 companies, mainly based in Japan. Some of these were on the edge of bankruptcy, including units cast-off by Toshiba and Hitachi. Then there was the financial crisis of 2008, and at the same time the personal computer growth shifted away from disc drives to solid-state storage modules for the new top-selling computer tablets and smartphones.

As a result, Nidec started a new international acquisition strategy in 2010, when their group sales were quoted at $8Bn. One of the largest deals was a major move into the North American market with the purchase of the Commercial and Industrial Motors and Appliance Controls businesses from Emerson Electric: combined these businesses accounted for more than $0.8Bn in sales. This was, in fact, the founding business of the Emerson Electric Manufacturing Company, started by John Wesley Emerson, a Civil War Union veteran, in St Louis in 1890.

Overall, Nidec spent $2.9Bn on acquisitions between 2010 and 2016. In their 2016 FY Nidec Group annual sales were quoted as $10.5Bn, which some analysts consider shows a lack of any organic growth over the six year period, the sales figures being enhanced by the acquisitions. Employees in 2016 were approximately 100,000, apparently 20% lower than two years earlier: this lower number still only results in sales of $105,000 per employee. More recently quoted figures have mentioned 140,000 employees.

Fractional Motors Market

A different, outside view (possibly a European biased view) was provided by IMS Research (now part of IHS) in 2012. In their view, driven by the multiple acquisitions made in the fractional HP motor market by major groups like ABB, Regal Benoit (of the US) and Nidec, Ametek of the USA spent $270m to acquire Dunkermotoren of Germany, a consolidation of two of the top ten manufacturers of such motors in the World, particularly concentrating on factory automation and medical markets: Dunkermotoren had sales of $170m. According to Bryan Turnbough, market research analyst with IMS: “Since the [2008] downturn, larger companies have been finding new areas of growth through acquisitions, while smaller companies are struggling to keep up. This is changing the competitive dynamics of the industrial fractional HP motors market, which has a low growth of between 3 and 4 percent annually”. Ametek and Dunkermotoren were considered amongst the market leaders in fractional HP DC motors, particularly aimed at rotary and linear motion applications, and the combination was seen as a threat to the dominance of the top two suppliers, Maxon and Faulhaber.

Nidec markets in 2016

The Nidec 2016 FY report shows small/fractional HP motors now represent only 38% of their total sales: the rest is automotive motors 23%, appliance and commercial motor markets 24%, plus 14% in instruments, factory automation, robots and switch components. Chairman Nagamori said that Nidec had “expanded our range from small precision to supersized motors of all kinds, and from motor peripherals to application products. These components are widely used not only in IT products but also in a wide range of fields including home appliances, automobiles, office equipment, industrial equipment, and environmental energy equipment. We strive to become the world’s No.1 comprehensive motor manufacturer, based on everything that spins and moves”.

Nagamori is known for his eccentric management style, and has been voted Japan’s best CEO. He is driven by ‘ambition and ego’: plus is always obsessed by cleanliness in the factories and of the workers. To him passion matters, and enthusiasm, and tenacity: “Motivated people can do anything if they work hard”. His style has enabled him to retain the backing of the Japanese banks and investors.

The Nidec $1.2Bn acquisition

So in 2016 Nagamori negotiated his largest ever acquisition, a $1.2Bn cash deal to buy two further Emerson businesses, Control Techniques of the UK and Leroy Somer of France. Emerson had been looking at the ‘strategic alternatives’ available to them for their motors and drives, and power generation and storage businesses for over a year, and there were several parties interested in the acquisition of the motors and drives companies – from Europe, Asia and elsewhere. Both had been acquired by Emerson in the 1990s, and employed 9500 people, producing combined sales of $1.7Bn in 2016.

Control Techniques manufacture variable speed drives, servo drives and motion controllers, with AC and servo motors, targeted at industrial applications. Similarly Leroy Somer produce alternators for power generation, diesel generators (at the Kato factory in the USA), and higher power motors and drives for industrial markets. Nagamori has visited the two European HQs, to meet and greet the staff following the acquisition: his normal approach is to look for dirt and grime, walls to paint, anything that can be cleaned up – hopefully he did not find any walls to paint. Whether the staff were reassured by his exhortation to “Look at the expansion in the use of robots, electric vehicles and drones” [as new markets for their motors and drives] is not certain. Nagamori had a very successful acquisition of Sankyo Seiki, a robot company in Japan in 2003, turning in a profit of $180m inside 12 months: Nidec also sells drone motors for the Amazon fleet. They were maybe happier with his statement that Nidec “put great emphasis on research and development”.

Time will tell. His latest (scaled down) target is group sales of 2000 Billion Yen by 2020, which equates to $18Bn, or 70% up on the 2016 figures. Consolidating the Emerson acquisition he has already added 16 of the required seventy points. As the company logo says: “Nidec…. All for Dreams”.

This article was first published in my column in the ‘South African Journal of Instrumentation and Control’, June 2017 issue, published by Technews in South Africa.

ABB’s acquisition of B&R examined

Alex West, principal analyst at IHS Markit in Wellingborough, UK, discusses whether the B&R acquisition will give ABB a boost in industrial automation.

The recent acquisition of B&R Automation is ABB’s latest acquisition and it brings an established range of PLCs, industrial PCs, HMIs, I/O modules, servo drives, and servo motors to the ABB portfolio. This is a move which gives ABB, one of the leading vendors in process automation, a step-up in terms of a discrete automation portfolio, which was an obvious gap in its offering.

IHS Markit ABB and BR Global Market SharesIt also brings access to discrete automation sectors and an established business with over 4,000 machine builders. By acquiring B&R Automation, ABB has expanded its ‘knowledge’ pool. It now has more expertise in discrete automation, which has strengthened its capability of providing products, and IoT solutions to OEMs in sectors like packaging machinery. There is certainly opportunity to expand its IoT solution business as the uptake of IoT technology has so far been faster in discrete sectors, particularly those that are consumer related.

ABB Chief Executive Officer, Ulrich Speisshofer, states that the combined global customer base will create huge opportunities for the Fourth Industrial Revolution, with an “installed base of more than 70 million connected devices, 70,000 control systems and now more than 3 million automated machines and 27,000 factory installations around the world”. It does sound impressive. Does this make the combined company a concern for other leading suppliers of industrial automation components?

Globally there is little change to the competitive environment in terms of supplier rankings. According to IHS Markit’s Industrial Automation Equipment Tracker, at a global level ABB shows little advancement in the market share ranking.  It will gain share for products such as industrial PCs, PLCs, servo drives and servo motors. The latter two product rankings show the greatest changes for the combined company. ABB was estimated to be ranked number 32 of servo drive suppliers and now moves to a top 15 position. For servo motors, ABB was ranked number 35 globally in 2015; the combined business is now estimated to put them at number 14. A significant change, but not enough to pose a threat to the leading suppliers to these markets.

This acquisition brings the combined company into more direct competition with Schneider Electric as it now has comparable global market shares for I/O modules, industrial PCs, position control hardware, servo drives, and servo motors. The greatest market share increase is estimated for the industrial PC market, with a market share increase of 3% to place the combined company as the seventh largest supplier in revenue terms. The market share increase is estimated at around 3% for the operator terminal and PLC markets. This puts ABB as the tenth largest supplier of operator terminals and sixth largest for PLCs at a global level.

EMEA market impact

ABB will also gain the ability to scale the machine automation business in Europe, where B&R Automation generates around 65% of global sales. In the EMEA region, ABB’s market share is estimated to increase by around 3% for I/O modules when using 2015 base figures. This moves ABB to second place of the leading suppliers to the EMEA market, above Schneider Electric. In EMEA the combined company is estimated to have gained market share of over 4% for operator terminals and PLCs, making it one of the top five leading suppliers for these products.

Industrial communications

Another area of likely change is that of industrial communication protocols. B&R Automation’s POWERLINK and openSAFETY protocols could now become the standard for ABB’s automation products. According to IHS Markit’s Industrial Communications Intelligence Service, POWERLINK is estimated to be the seventh largest industrial protocol at a global level in terms of 2015 new node connections; sixth in the EMEA region. For openSAFETY, it is estimated to be the eighth largest safety protocol at a global level by new node connections. ABB’s acquisition of B&R Automation may see these protocols’ being more widely supported with a larger product portfolio, which could impact share of other leading industrial communication protocols.

Smart manufacturing

An area that may be worth watching is the ABB Ability Platform and how it will develop over the next few years. With trends to IIoT and smart manufacturing it is becoming increasingly important for industrial automation companies to develop and support software portfolios. This may be a driver of further ABB acquisitions as Spiesshofer explained to reporters “There will be more acquisitions…as one of the drivers of growth going forward, but there is no ‘must haves’ we are desperate about.”

The ABB acquisition of B&R Automation will fill a gap in the existing portfolio and will give them access to an established and loyal machine builder customer base. This will certainly be a concern for other leading suppliers to these product markets and sectors. The combined company will likely represent more of a challenge to some of the leading suppliers of I/O modules, industrial PCs, servo drives, and servo motors. At a global level, the acquisition is estimated to have made marginal improvements to the supplier rankings for machinery automation.

Yokogawa invests in IIOT cybersecurity

Yokogawa has made some significant investments in the resources needed to develop future techniques for IIOT cybersecurity, first with a new engineering centre to be established in California, and second, by investing US$900,000 into Bayshore Networks, as a partner in a current round of venture capital funding.

New IIOT Division

The new Yokogawa Architecture Development Division in California will pursue the development of the core technologies needed to establish the robust and flexible architecture required to improve operational efficiency and productivity when using the IIoT. The new division will function as a unit of the Yokogawa Marketing Headquarters Business Development Centre, and will keep up with the new technologies being developed every day in the IIoT sector – as well as facilitate close co-ordination with partner companies. The West Coast of the USA is therefore the correct location for this work. The division will be staffed by engineers from Yokogawa who have an extensive knowledge of Yokogawa systems and services, and locally recruited engineers who are conversant in a range of IT fields. The first employees of the division have been located at the local engineering office of a partner company since November 2016, but their own offices are scheduled to open in April 2017. Subsequently, the division will add functions for planning services that use the IIoT and cloud computing, and it is expected that the number of staff will be increased to around 50 over the next five years.

Investment in Bayshore

A parallel press release from Yokogawa explains that there has also been a $900k strategic equity investment into Bayshore Networks, a company established in 2012 that has gained rapid recognition for its expertise in cybersecurity.

Mike Dager, CEO of Bayshore, commented “Yokogawa shares our vision for a secure industrial internet of things enabling new applications that will increase safety, optimize processes, and drive efficiencies. We are proud and excited to partner with such a renowned global leader in industrial controls.”

This Yokogawa investment is part of the recent US$6.6M Series A funding for Bayshore, arranged by Trident Capital Cybersecurity, and its existing angel investors.

Trident Capital

Trident Capital Cybersecurity is a venture capital firm that invests in early-stage companies leveraging emerging technologies in cybersecurity. The firm is a spinout of (or maybe the successor to) Trident Capital, which in 1998 became one of the pioneers of cybersecurity venture capital investing. Renowned as the venture capital firm with the most valuable network of cybersecurity relationships, Trident Capital Cybersecurity also relies on input from a 40–person Cybersecurity Advisory Council, consisting of industry CEOs, customers and former top-level government leaders.

“We led the Series A Investment because Bayshore has been recognized as an innovator and early leader in an emerging cybersecurity segment that is largely untapped to date,” said J. Alberto Yépez, managing director of Trident Capital Cybersecurity. “We are honoured to have Yokogawa join us in supporting the development of the cutting-edge Bayshore technology and business.”

The Trident Capital Cybersecurity website claims 28 cybersecurity investments and 16 successful exits. These have included the Solera acquisition by BlueCoat in 2013, the Qualys IPO in 2012, the acquisition of Accertify by American Express in 2010, the Sygate acquisition by Symantec in 2006 and the Signio acquisition by VeriSign in 2000.

The Bayshore technology

The Bayshore cloud-based software, called the Bayshore IT/OT Gateway, provides IT departments with visibility into OT (Operational Technology) infrastructure, networks, applications, machines and workers.  These OT networks are undergoing transformation and require services traditionally available for IT networks, such as secure remote access and analytics. Bayshore provides immediate value by preventing OT process disruptions and enhancing operational efficiency and business continuity.   The software is distinguished by extremely granular inspection and filtering of network flows – all the way down to machine sensor values – and the ability to provide security enforcement and application segmentation and isolation via flexible, rapidly deployed policies.  The Bayshore policy engine is capable of supporting common industrial protocols and quickly adapting to new and proprietary protocols.

These capabilities are built from the ground up for Industrial Internet and provide Bayshore customers with future-proof, cloud-based solutions that are complementary to legacy hardware-based industrial firewalls. Designed for IT perimeter security, firewalls look for IP addresses and ports, which means they block attacks according to standard Internet parameters.  Because industrial cyber-attacks are typically based on granular machine instructions that alter sensor values, the unique Bayshore technology is well positioned to detect industrial attacks that are often overlooked by other security technologies.

Bayshore has strategic alliances with leading technology companies including AT&T, BAE Systems, Cisco Systems, and VMware. It is currently based in New York, but intends to relocate the HQ to Bethesda, Maryland. No engineering base is quoted as existing in California.

2017 Business plan comes together

satoru-kurosu-med

Earlier, Yokogawa had announced the completion of the acquisition of Soteica Visual Mesa (SVM), the leading energy management technology provider, which will be integrated into KBC Advanced Technologies (acquired in April 2016) alongside “Data as a Service” (DaaS) provider Industrial Knowledge (acquired December 2015). Satoru Kurosu, executive vice president and head of Yokogawa’s Solutions Service Business Headquarters, commented that these moves delivered on a number of the key objectives of the Yokogawa Transformation 2017 mid-term business plan: “Key strategic objectives of Yokogawa’s Transformation 2017 plan are to expand the solution service business, focus on customers, and co-create new value with customers through innovative technologies and services.”

(c) ProcessingTalk

P+F buys ecom to complete hazardous area capability with mobile devices

Ecom instruments from Assamstadt in Germany was established 30 years ago, and has specialised in portable equipment suitable for use in the most hazardous areas of a plant, ie Zone 1 rated explosion hazard areas on a petrochemical plant, etc. This extends from a torch, through to a mobile phone, PDA, laptop etc, as well as measuring instruments and calibration equipment. They recently developed into providing similar barcode scanner systems, plus intelligent software and applications.

At the end of October it was announced that Pepperl + Fuchs of Mannheim, also in Germany, a family-owned company well known for industrial sensor systems and explosion protection in general, had acquired the whole business of ecom instruments GmbH. In this way P+F adds to their existing (static) explosion protection portfolio and know-how offering by including mobile devices and solutions.

Dr Gunther Kegel, CEO of P+F, commented “In ecom instruments we found an industry pioneer with 15% growth rate lately who, for decades, proved and strengthened his technology leadership in mobile explosion protection and now complements our offering with a competitive portfolio reaching far into the future”.

“Besides the expanded product portfolio we can see new opportunities arising along the entire value added chain. With this we can not only strengthen our offering in the field of explosion protection, but we can achieve a much better market position – with a partner from our region – and consequently generate new solutions around the complex of Industrie 4.0”.

Rolf Neid, the Founder and Managing Partner of ecom Instruments, commented: “The expertise in explosion protection and the wide-spread international sales force of Pepperl+Fuchs made them our favourite partner from the very beginning. Our innovative devices do not only fill a gap in their portfolio, but allow ecom instruments and Pepperl+Fuchs to develop future business models and solutions at the Center of Competence at Assamstadt to gain access to the enormous growth potential of the ongoing digitalization of industry”.

P+F hazardous area business

The P+F Process Automation Division is world-market leader in the field of explosion protection in hazardous areas using intrinsic safety. Furthermore, the Division offers large varieties of application-oriented system solutions for process industries. The portfolio consists of analogue isolation barriers, fieldbus topology systems, remote I/O systems, HART interfaces, level control sensors, purge systems, HMI devices, as well as power supplies and signalling devices.

The P+F UK factory in Wednesbury, in the Midlands, produces Exd and Exe junction boxes, cabinets and control panels and switching systems for hazardous area use, plus accessories such as light fittings, floodlights and beacons for hazardous areas. The factory, originally known as Walsall Ltd, was acquired by P+F in 2009, and a visit to see the expanded operation in 2012 was reported on Processingtalk.info – see the story “P+F invests in factory for Exd, Exe housings

GE and Baker Hughes combine

The Offshore Engineer reports that GE and Baker Hughes are teaming up to form the “new” Baker Hughes, a company that will be led by current GE Oil & Gas CEO Lorenzo Simonelli and have dual headquarters in Houston and London.

The agreement will combine GE’s oil and gas business (GE Oil & Gas) and Baker Hughes, in what the two hope will be a leading equipment, technology and services provider with US$32 billion of combined revenue and operations in more than 120 countries.

The deal has already been unanimously approved by the boards of directors of both companies. At closing, which is expected in mid-2017, Baker Hughes shareholders will receive a special one-time cash dividend of $17.50 per share and 37.5% of the new company, with GE owning the remaining 62.5%. The deal is still subject to approval by Baker Hughes shareholders, regulatory approvals, and other customary closing conditions.

Both GE and Baker Hughes expect to generate “total run-rate synergies” of $1.6 billion by 2020, which has a net present value of $14 billion, that will primarily be driven by cost out, and positioned for growth as the industry rebounds.

“By drawing from GE technology expertise and Baker Hughes capabilities in oilfield services, the new company will provide best-in-class physical and digital technology solutions for customer productivity,” the two companies said in a joint statement.

The new company will combine the digital solutions, manufacturing expertise and technology from GE, in addition to the track record of success Baker Hughes has in the oilfield services sector.

“With combined revenue of over $32 billion, the product portfolio of GE Oil & Gas and Baker Hughes in drilling, completions, production and midstream / downstream equipment and services will create the second largest player in the oilfield equipment and services industry,” according to the statement from the two companies. “Customers should expect sustainable innovation and integration that will deliver valuable outcomes. Both companies have invested even in the downturn and have strong, complementary competitive scope across the industry. From GE’s fullstream oil and gas manufacturing and technology solutions spanning across subsea and drilling, rotating equipment, imaging and sensing, to the Baker Hughes portfolio in drilling and evaluation and completion and production, the combined company will be moving beyond oilfield services and into oil and gas productivity solutions.”

Upon closing, the new Baker Hughes board will consist of nine directors: five of whom, including Chairman Jeff Immelt will be appointed by GE and four, including Vice Chairman Martin Craighead will be appointed by Baker Hughes.

“This transaction creates an industry leader, one that is ideally positioned to grow in any market. Oil and gas customers demand more productive solutions. This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes,” said Jeff Immelt, GE chairman and CEO. “As we go forward, this transaction accelerates our capability to extend the digital framework to the oil and gas industry. An oilfield service platform is essential to deliver digitally enabled offerings to our customers. We expect Predix to become an industry standard and synonymous with improved customer outcomes.”

“This compelling combination brings together best-in-class oilfield equipment manufacturing and services, and digital technology offerings for the benefit of all customers and stakeholders,” Martin Craighead, Baker Hughes chairman and CEO said. “The combination of our complementary assets will create a platform capable of seamless integration while we enhance our ability to deliver optimized and integrated solutions and increase touch points with our customers.”

“This transformative transaction will create a powerful force in the oil and gas market as we continue to drive long-term value for our customers and shareholders,” Simonelli said. “Both companies’ employees will benefit significantly from being part of a larger, stronger company that is positioned for long-term growth. We look forward to combining the digital solutions and technology from the GE Store with the domain expertise of Baker Hughes and its culture of innovation in the oilfield services sector.”

The full release is available on http://www.businesswire.com/news/home/20161031005488/en/