SUBCY Subsea 7 SA (PK)

By Dana Mattioli and Thomas Gryta 

General Electric Co.'s Baker Hughes recently held takeover talks with energy-services company Subsea 7 SA, according to people familiar with the matter.

Talks between the two companies recently broke down over price, the people said. It is possible that the companies could reignite talks, one of the people said.

As of Tuesday, U.K.-based Subsea 7 had a market value of $5.4 billion. The company is a construction-and-services contractor to the offshore energy industry. Year to date, its stock price is up nearly 30%.

Baker Hughes -- officially known as Baker Hughes, a GE Company -- was formed in July when General Electric Co closed a deal to combine its oil-and-gas business with Baker Hughes Inc. The company, which has a $40 billion market value, is 62.5% owned by GE and 37.5% owned by Baker Hughes shareholders.

Earlier this year, Subsea 7 made a bid for the struggling operations of EMAS Chiyoda Subsea Ltd., whose fleet of ships puts together offshore-drilling projects, under a proposal filed with a U.S. Bankruptcy Court.

The oilfield-services space has been consolidating as boards of directors have identified a need for greater scale to advance. The industry has been routed since 2014 as oil prices fell from over $100 a barrel to less than $30.

The industry shed tens of thousands of jobs during the slump and was forced to accept pricing cuts -- sometimes more than 50% -- from its customers. More than 200 oil-field-service companies went bankrupt.

Meanwhile, on Monday, The Wall Street Journal reported that offshore energy company Helix Energy Solutions Group Inc. is exploring a sale. Baker Hughes, prior to merging with GE's oil-and-gas business, had agreed to merge with service company Halliburton Co., but that deal later fell apart.

The Journal reported in August that Dover Corp. is exploring strategic options for most of its energy business, including a sale, merger or spinoff of the business, which makes industrial energy equipment.

Write to Dana Mattioli at dana.mattioli@wsj.com and Thomas Gryta at thomas.gryta@wsj.com

(END) Dow Jones Newswires

October 11, 2017 07:22 ET (11:22 GMT)

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