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Baker, Hughes Tool Formally Complete Much-Delayed Merger

April 04, 1987|LESLIE BERKMAN | Times Staff Writer

The much-delayed merger of Baker International and Hughes Tool was formally completed Friday, creating a new company with more than $2 billion in annual revenue and a leadership position in the manufacture of oil drilling equipment.

The $1.2-billion stock swap is meant to improve the fortunes of both companies in the current downturn of the oil service industry.

The deal's consummation seemed in jeopardy a few weeks ago when the companies were at loggerheads over terms of a Justice Department consent decree meant to forestall anti-competitive repercussions of the merger.

Ultimately, both agreed to the sale of Baker's domestic electrical submersible pump operation and of most of Baker's highly valued Reed Tool division, a major manufacturer of rock bits used in oil well drilling.

"The consent decree was signed and filed today," said James D. Woods, chief executive of the merged companies. Woods formerly was chief executive of Baker, which in late February moved its executive staff from Orange to Houston--corporate headquarters of Hughes and now the home of Baker Hughes Inc.

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