UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): November 3, 2017
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Baker Hughes, a GE company
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Baker Hughes, a GE company, LLC
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(Exact
name of registrant as specified in charter)
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Delaware
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1-38143
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81-4403168
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Delaware
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1-09397
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76-0207995
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(State of Incorporation)
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(Commission File No.)
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(I.R.S.
Employer
Identification
No.)
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(State of Incorporation)
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(Commission File No.)
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(I.R.S.
Employer
Identification
No.)
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17021 Aldine Westfield Road, Houston, Texas
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77073
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s
telephone number, including area code: (713) 439-8600
(former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
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Item 1.01 Entry into
a Material Definitive Agreement.
Equity Repurchase Agreement
with General Electric
On November 5, 2017, Baker Hughes,
a GE company (the “Company”) and Baker Hughes, a GE company, LLC (“BHGE LLC”) entered into an agreement
with General Electric Company (“GE”) related to the repurchase of the Company’s Class B common stock and the
corresponding BHGE LLC common units (the “Agreement”) as described under Item 8.01 below.
Under the terms of the Agreement,
BHGE LLC will repurchase its common units from GE on a pro rata basis and on the same terms as it repurchases common units from
the Company. The proceeds of such repurchase that are distributed to the Company will be used to repurchase Class A shares of
the Company on the open market or in privately negotiated transactions. The Class B shares of the Company that are paired with
repurchased common units will be repurchased by the Company at par value. The Agreement includes a true-up mechanism so that the
repurchase price paid to GE and the Company equals the repurchase price paid by the Company for its Class A common stock. The
repurchases are not expected to change the Company’s and GE’s relative economic interests in BHGE LLC or the Company’s
Class A and Class B stockholders’ relative voting interest.
As previously disclosed, on July
3, 2017, the transactions (the “Transactions”) to combine GE’s Oil & Gas business and Baker Hughes Incorporated
(the predecessor to BHGE LLC) was completed. Following the Transactions, GE held an approximately 62.5% interest in BHGE LLC and
former stockholders of Baker Hughes Incorporated held an approximately 37.5% interest in BHGE LLC through the ownership of 100%
of the Class A common stock of the Company. GE’s interest is held through a voting interest of Class B common stock in the
Company and its economic interest through a corresponding number of BHGE LLC’s common units.
The foregoing description of
the Agreement is not a complete description thereof and is qualified in its entirety by reference to the full text of the Agreement,
which is filed as Exhibit 10.1 and incorporated herein by reference.
Item 2.03 Creation of a Direct
Financial Obligation of a Registrant.
Commercial Paper Program
On November 3, 2017, BHGE LLC
entered into definitive documentation to establish a commercial paper program (the “Program”) under which BHGE LLC
may issue on a private placement basis unsecured commercial paper notes (the “Notes”) up to a maximum aggregate amount
outstanding at any time of $3 billion. Under the Program, BHGE LLC may issue Notes from time to time, and the proceeds of the
Notes are expected to be used for general corporate purposes. Amounts available under the Program may be reborrowed.
Initially, two commercial paper
dealers will each act as a dealer under the Program (each a “Dealer” and, collectively, the “Dealers”)
pursuant to the terms and conditions of a commercial paper dealer agreement entered into between BHGE LLC and each Dealer (each,
a “Dealer Agreement”). Each Dealer Agreement provides the terms under which the Dealers will either purchase from
BHGE LLC or arrange for the sale by BHGE LLC of Notes pursuant to an exemption from federal and state securities laws. Each Dealer
Agreement contains customary representations, warranties, covenants and indemnification provisions. A national bank acts as
the issuing and paying agent under the Program pursuant to the terms of an issuing and paying agent agreement.
The maturities of the Notes will
vary, but may not exceed 397 days from the date of issue. The Notes will bear such interest rates, if interest bearing, or will
be sold at such discount from their face amounts, as shall be agreed upon from time to time by the Dealers and BHGE LLC. The rates
of interest will depend on whether the Note will be a fixed or floating rate.
The description above is a summary
of the Program and is qualified in its entirety by the complete text of the Program itself.
No direct financial obligations
of BHGE LLC have arisen under the Program as of the date hereof.
The Notes have not been and will
not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws,
and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements
of the Securities Act and applicable state laws. The information contained in this Current Report on Form 8-K shall not constitute
an offer to sell or the solicitation of an offer to purchase Notes under the Program.
Item 8.01 Other Events.
Share Repurchase Authorization
On November 6, 2017, the Company
announced that its board of directors authorized BHGE LLC to repurchase up to $3 billion of its common units from the Company
and GE pursuant to the terms of the Agreement described in Item 1.01 above. The proceeds of such repurchase that are distributed
to the Company will be used to repurchase Class A shares of the Company on the open market or in privately negotiated transactions.
The Class B shares of the Company that are paired with repurchased common units will be repurchased by the Company at par value.
The Company issued the press
release attached hereto as Exhibit 99.1 on November 6, 2017, which is incorporated by reference herein.
Governance Principles
On October 27, 2017, the governance
principles of the Company were amended to provide that members of the board of directors of the Company who are over 75 years
old will not be nominated for election to the board. Previously, directors who were 70 years old at the time of incorporation
of the Company would not be nominated for election once over 80 years old. The full board may nominate candidates who have served
past their term limit or the retirement age in special circumstances.
Item 9.01 Financial Statements
and Exhibits.
(d) Exhibits.
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10.1
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Equity Repurchase Agreement, dated as of November 6, 2017, by and among
General Electric Company, Baker Hughes, a GE company, and Baker Hughes, a GE company, LLC.
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99.1
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News Release of Baker Hughes, a GE company dated November 6, 2017.
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Signature
Pursuant to
the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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BAKER HUGHES, A GE COMPANY
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Dated: November 6, 2017
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By:
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/s/
Lee Whitley
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Lee
Whitley
Corporate
Secretary
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BAKER HUGHES, A GE COMPANY, LLC
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Dated: November 6, 2017
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By:
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/s/
Lee Whitley
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Lee
Whitley
Corporate
Secretary
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EXHIBIT 10.1
EQUITY
REPURCHASE AGREEMENT
This EQUITY
REPURCHASE AGREEMENT (this “
Agreement
”), is entered into as of November 5, 2017, by and among General Electric
Company, a New York corporation (“
GE
”), Baker Hughes, a GE company, a Delaware corporation (“
BHGE
”),
and Baker Hughes, a GE company, LLC, a Delaware limited liability company (“
BHGE LLC
”). Each of the foregoing
parties is referred to herein individually as a “
Party
” and collectively as the “
Parties
”.
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the BHGE LLC Agreement (as
defined below).
W
I T N E S S E T H:
WHEREAS,
GE, BHGE and BHGE LLC are parties to that certain Amended and Restated Limited Liability Company Agreement, dated as of July 3,
2017, among BHGE LLC and its Members, including GE and certain Affiliates of GE (as the same may be amended from time to time,
the “
BHGE LLC Agreement
”), which provides for the management, operation and governance of BHGE LLC and sets
forth the rights and obligations of the Members in BHGE LLC generally;
WHEREAS,
BHGE intends to repurchase shares of its Class A common stock, par value $0.0001 per share (the “
Class A Shares
”
and, together with the shares of Class B common stock, par value $0.0001 per share, of BHGE (the “
Class B Shares
”),
the “
Common Stock
”), from BHGE stockholders through open market purchases, private purchases or pursuant to
an accelerated share repurchase program (the “
Stock Repurchase Program
”);
WHEREAS,
BHGE LLC will repurchase Common Units from the Newco Group Members on a one-for-one basis with Class A Shares purchased by BHGE
at a price per Common Unit equal to the price paid per Class A Share, as provided in Section 3.11 of the BHGE LLC Agreement (the
“
Unit Repurchase
” and, together with the Stock Repurchase Program, the “
Program
”);
WHEREAS,
GE intends to surrender to BHGE and BHGE LLC for repurchase, or cause the other GE Group Members to surrender to BHGE and BHGE
LLC for repurchase, and BHGE and BHGE LLC shall repurchase, 1.6747 Class B Shares and 1.6747 Common Units, respectively, for each
Class A Share repurchased by BHGE at a price per Paired Interest equal to the price per Common Unit paid by BHGE LLC for the corresponding
Common Unit repurchased from the applicable Newco Group Member; and
WHEREAS,
it is the intention of the Parties that following completion of the Program, the GE Group Members will hold such number of Paired
Interests as results in the GE Group Members, on the one hand, and the Newco Group Members, on the other hand, holding the same
respective percentages of the outstanding Common Units and outstanding shares of Common Stock as they held immediately prior to
the commencement of the Program, subject to any
adjustments
made in accordance with the BHGE LLC Agreement between the date hereof and the end of the Program or any changes in the Exchange
Ratio that are unrelated to the Program.
NOW, THEREFORE,
in consideration of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Party hereby
agrees as follows:
1.
Agreement to Surrender Paired Interests
. In connection with the Unit Repurchase:
(a)
GE shall surrender to BHGE for repurchase, or cause the other GE Group Members to surrender to BHGE for repurchase, and
BHGE shall repurchase, 1.6747 Class B Shares for each Class A Share repurchased by BHGE, simultaneously with the repurchase by
BHGE of each Class A Share and the corresponding repurchase by BHGE LLC of a Common Unit from a Newco Group Member, which number
of Class B Shares shall be subject to the adjustment set forth in paragraph 3 below.
(b)
GE shall surrender to BHGE LLC for repurchase, or cause the other GE Group Members to surrender to BHGE LLC for repurchase,
and BHGE LLC shall repurchase, 1.6747 Common Units for each Class A Share repurchased by BHGE, simultaneously with the repurchase
by BHGE of each Class A Share and the corresponding repurchase by BHGE LLC of a Common Unit from a Newco Group Member, which number
of Common Units shall be subject to the adjustment set forth in paragraph 3 below.
To the extent
it is not practicable for GE to surrender for repurchase or cause the other GE Group Members to surrender for repurchase a Paired
Interest simultaneously with each such repurchase by BHGE of a Class A Share and by BHGE LLC of a Common Unit provided for above,
or GE requests a delay in such surrender or repurchase, the Parties agree that such surrender and repurchase of such Paired Interest
shall be effected as promptly as reasonably practicable thereafter (and in any event prior to each fiscal quarter end and prior
to any distribution by BHGE LLC to its Members), and may in such circumstances be aggregated with other such surrenders and repurchases
of Paired Interests in accordance with this Agreement. GE’s commitment under this paragraph 1 shall not extend to any repurchase
of Class A Shares effected with the proceeds of any borrowing prior to the date of the repurchase, the parameters of any which
borrowing and distribution to be agreed by the Parties prior thereto.
2.
Price
. The Parties agree that the price payable by (a) BHGE to the relevant GE Group Member for each Class B Shares
repurchased in accordance with paragraph 1 shall be equal to the par value of such Class B Share, and (b) BHGE LLC to the relevant
GE Group Member for each Common Unit repurchased in accordance with paragraph 1 shall be the same as that paid by BHGE to repurchase
the corresponding Class A Share and that paid by BHGE LLC to redeem the corresponding Common Unit from BHGE (in each case less
the par value of a Class B Share), which purchase price may be subject to adjustment as set forth in paragraph 3 below.
3.
Adjustment
. Subject to any adjustments made in accordance with the BHGE LLC Agreement between the date hereof and
the end of the Program or any changes in the Exchange Ratio
that are unrelated to the Program, in the event that following the completion of the Program, the GE Group Members do not hold
such number of Paired Interests as results in the GE Group Members, on the one hand, and the Newco Group Members, on the other
hand, holding the same respective percentages of the outstanding Common Units and outstanding shares of Common Stock as they held
immediately prior to the commencement of the Program, the Parties agree that an adjustment shall be made to (i) the number of
Paired Interests surrendered by the GE Group Members and repurchased by BHGE LLC and BHGE and/or (ii) the price paid by BHGE LLC
to the GE Group Members in connection with such repurchases, so that following any such adjustments, the GE Group Members shall
hold such number of Paired Interests as results in the GE Group Members, on the one hand, and the Newco Group Members, on the
other hand, holding the same respective percentages of the outstanding Common Units and outstanding shares of Common Stock as
they held immediately prior to the commencement of the Program;
provided
that, without limiting the foregoing, to the extent
BHGE enters into an accelerated share repurchase program as part of the Program, the Parties agree to make appropriate adjustments
to take into account the settlement of such accelerated share repurchase program so as to maintain such respective percentages.
4.
Miscellaneous
. Sections 15.03 (
Notices
), 15.04 (
Binding Effect
), 15.05 (
Governing Law; Jurisdiction;
Specific Performance
), 15.06 (
Counterparts; Electronic Transmission of Signatures
), 15.07 (
Assignment; No Third
Party Beneficiaries
), 15.08 (
Severability
), 15.11 (
Waiver
), 15.13 (
Further Action
) and 15.15 (
Descriptive
Headings; Interpretation
) of the BHGE LLC Agreement are hereby incorporated by reference into this Agreement,
mutatis mutandis
,
as if fully set forth herein.
5.
Entire Agreement
. This Agreement constitutes the entire agreement, and supersedes all other prior agreements and
understandings (both written and oral), between the Parties with respect to the subject matter hereof.
6.
Amendment
. No amendment of this Agreement will be effective unless made in writing and signed by a duly authorized
representative of such party.
[
Signature
Page Follows
]
IN WITNESS
WHEREOF, the Parties have caused this Agreement to be duly executed and delivered as of the date first written above.
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GENERAL ELECTRIC COMPANY
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By:
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/s/ Jim Waterbury
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Name:
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Jim Waterbury
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Title:
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Vice President
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BAKER HUGHES, A GE
COMPANY
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By:
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/s/ Lee Whitley
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Name:
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Lee Whitley
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Title:
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Corporate Secretary
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BAKER HUGHES, A GE
COMPANY, LLC
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By:
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EHHC NewCo, LLC,
its Managing Member
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By:
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/s/ Lee Whitley
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Name:
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Lee Whitley
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Title:
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Corporate Secretary
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EXHIBIT 99.1
Baker Hughes, a GE company Announces $3
Billion Share Repurchase Authorization
HOUSTON & LONDON--(November
6 , 2017)-- Baker Hughes, a GE company (NYSE: BHGE) ("BHGE" or the "Company") today announced that its Board
of Directors has authorized Baker Hughes, a GE company, LLC (“BHGE LLC”) to repurchase up to $3 billion of its common
units from BHGE and GE. The Company will use the proceeds from the sale of its BHGE LLC common units to repurchase its Class A
shares. In addition, the Company also announced its intention for BHGE LLC to issue new debt.
“Today’s announcement
represents an important step in our plan to optimize BHGE’s capital structure. We believe the buyback is an attractive use
of cash given the value of our franchise and the highly accretive nature of this program,” said Lorenzo Simonelli, BHGE
Chairman and Chief Executive Officer.
“At the current share price,
this repurchase represents approximately eight percent of the Company's outstanding shares. We are pleased that BHGE’s strong
balance sheet enables us to not only return value to shareholders through our regular quarterly dividend and share repurchases,
but also invest in opportunities that will strengthen our fullstream portfolio and drive long-term growth."
BHGE and BHGE LLC have also entered
into an agreement with GE whereby BHGE LLC will repurchase its common units from GE on a pro rata basis and on the same terms
as it repurchases common units from BHGE. The proceeds distributed to BHGE will be used to repurchase Class A shares on the open
market or in privately negotiated transactions. The repurchases will not materially change BHGE and GE’s relative economic
interests in BHGE LLC or BHGE’s Class A and Class B stockholders’ relative voting interest.
BHGE may from time to time enter
into one or more 10b5-1 plans to effect the repurchase of its Class A shares. The repurchase program may be suspended or discontinued
at any time and does not have a specified expiration date.
Forward-Looking
Statements
This news
release (and oral statements made regarding the subjects of this release) may contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
(each a “forward-looking statement”). The words “anticipate,” “believe,” “ensure,”
“expect,” “if,” “intend,” “estimate,” “project,” “foresee,”
“forecasts,” “predict,” “outlook,” “aim,” “will,” “could,”
“should,” “potential,” “would,” “may,” “probable,” “likely,”
and similar expressions, and the negative thereof, are intended to identify forward-looking statements. There are many risks and
uncertainties that could cause actual results to differ materially from our forward-looking statements. These forward-looking
statements are also affected by the risk factors described in the Company’s Registration Statement on Form S-4 (File No.
333-216991), filed by the Company with the SEC and declared effective on May 30, 2017; the Company’s subsequent quarterly
reports on Form 10-Q for the quarterly periods ended June 30, 2017 and September 30, 2017; and those set forth from time to time
in other filings with the Securities and Exchange Commission (“SEC”). The documents are available through the Company’s
website at:
www.investors.bhge.com
or through the SEC’s Electronic Data Gathering
and Analysis Retrieval (“EDGAR”) system at:
www.sec.gov
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Statements in this press release
regarding share repurchases and debt issuances that are forward-looking are based on management’s estimates, assumptions
and projections, and are subject to significant uncertainties and other factors, many of which are beyond our control. Important
risk factors could cause future events to differ materially from those currently estimated by management, including, but not limited
to the following:
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Significant
disruptions in the equity or debt markets could negatively impact our ability to repurchase
the Class A shares or BHGE LLC’s ability to repurchase the common units or issue
long-term debt.
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The
Company and BHGE LLC have no commitments from any third party with respect to the issuance
of any debt. BHGE LLC’s ability to issue debt will be dependent on numerous
conditions such as debt issuance costs, interest rate fluctuations and changes in our
future cash requirements, capital requirements, results of operations, financial condition
and/or cash flows.
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If
BHGE LLC is not able to obtain debt on acceptable terms, it may not be able to carry
out the buybacks under the stock buyback authorization.
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Share
repurchases may be suspended or discontinued by the Company at any time.
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No assurances can be given that any of the events anticipated
by the forward-looking statements will transpire or occur, or if any of them do occur, what impact they will have on our results
of operations, financial condition or cash flows. We undertake no obligation to publicly update or revise any forward-looking statement.
# # #
About Baker Hughes, a GE company
Baker Hughes, a GE company (NYSE:
BHGE) is the world’s first and only fullstream provider of integrated oilfield products, services and digital solutions.
We deploy minds and machines to enhance customer productivity, safety and environmental stewardship, while minimizing costs and
risks at every step of the energy value chain. With operations in over 120 countries, we infuse over a century of experience with
the spirit of a startup – inventing smarter ways to bring energy to the world.
Source: Baker Hughes, a GE company
(BHGE)
Contacts:
Media Relations:
Stephanie Cathcart, +1 202-549-6462
stephanie.cathcart@bhge.com
Melanie Kania, +1 713-439-8303
melanie.kania@bhge.com
