Filed Pursuant to Rule 424(b)(2)
Registration No. 333-228341
The information in this preliminary prospectus supplement is not complete and may be changed without notice. This preliminary prospectus supplement and the accompanying base prospectus do not constitute an offer to sell these securities and are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 10, 2019
Preliminary Prospectus Supplement
(To Prospectus dated November 13, 2018)
105,000,000 Shares
Baker Hughes, a GE company
Class A Common Stock
General Electric Company (GE), GE Oil & Gas US Holdings I, Inc., GE Holdings (US), Inc. and GE Oil & Gas US Holdings IV, Inc. (collectively, together with GE, the GE Parties or the selling stockholders) are offering 105,000,000 shares of Class A common stock, par value $0.0001 per share (the Class A common stock), of Baker Hughes, a GE company. We will not receive any proceeds from the sale of Class A common stock by the selling stockholders. The Class A common stock included in this offering consists of shares of Class A common stock to be issued to the selling stockholders in connection with this offering upon exchange by the selling stockholders of an equal number of shares of our Class B common stock, par value $0.0001 per share (the Class B common stock), together with an equal number of associated membership interests (the LLC Units) of Baker Hughes, a GE company, LLC (BHGE LLC), pursuant to the Exchange Agreement (as defined herein). See SummaryThe Combination of Baker Hughes Incorporated and GE Oil & Gas and Our Relationship with Baker Hughes, a GE Company, LLC.
In connection with this offering, we have agreed to repurchase from one or more of the selling stockholders, in a privately negotiated transaction, $250,000,000 of shares of our Class B common stock, together with an equal number of associated LLC Units of BHGE LLC, at a price equal to the price per share at which the underwriters will purchase shares of our Class A common stock from the selling stockholders in this offering (the share repurchase). This offering is not conditioned upon the completion of the share repurchase, but the share repurchase is conditioned upon the completion of this offering and will be completed immediately following the offering. The offering and the share repurchase have been unanimously approved by our board of directors, and the share repurchase has been also unanimously approved by the Conflicts Committee of our board of directors comprised of independent directors who are not affiliated with the selling stockholders. See SummaryRecent DevelopmentsShare Repurchase.
Following this offering, GE and its affiliates will hold approximately % of the voting power of all classes of our outstanding voting stock (or approximately % of the voting power of all classes of our outstanding voting stock assuming the underwriters exercise their option to purchase additional shares in full). As a result, we will cease to be a controlled company within the meaning of the corporate governance standards of the New York Stock Exchange, or NYSE, and, as a result, will no longer continue to qualify for and rely on exemptions from certain corporate governance requirements, but may continue to qualify for, and rely on, certain transition-based exemptions from such corporate governance requirements. See SummaryOrganizational Structure.
Our Class A common stock is listed on the NYSE under the symbol BHGE. On September 9, 2019, the closing sales price of our Class A common stock as reported on the NYSE was $24.18 per share.
Investing in our Class A common stock involves risks. You should carefully read and consider the Risk Factors beginning on page S-7 of this prospectus supplement and in our other filings with the Securities and Exchange Commission, or the SEC, incorporated by reference in this prospectus supplement or the accompanying prospectus before deciding to invest in our Class A common stock.
Neither the SEC nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
Per Share | Total | |||||||
Public offering price |
$ | $ | ||||||
Underwriting discounts and commissions(1) |
$ | $ | ||||||
Proceeds, before expenses, to the selling stockholders |
$ | $ |
(1) | See Underwriting for a description of the compensation payable to the underwriters. |
The underwriters will have the option to purchase within 30 days from the date of this prospectus supplement up to an additional 15,750,000 shares of Class A common stock from the selling stockholders.
The underwriters expect to deliver the shares against payment to purchasers on or about , 2019 through the book-entry facilities of The Depository Trust Company.
Joint Book-Running Managers
J.P. Morgan | Citigroup | Goldman Sachs & Co. LLC | Morgan Stanley |
BofA Merrill Lynch |
BNP PARIBAS | Evercore ISI |
, 2019.
PROSPECTUS SUPPLEMENT
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PROSPECTUS
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Neither we, the selling stockholders nor the underwriters have authorized anyone to provide you with information different from that contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or in any free writing prospectus prepared by us or on our behalf. Neither we, the selling stockholders nor the underwriters take any responsibility for, or can provide any assurance as to the reliability of, any information other than the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing prospectus prepared by us or on our behalf. The selling stockholders and the underwriters are not offering to sell, nor soliciting offers to buy, shares of our Class A common stock in any jurisdiction where an offer or sale is not permitted.
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You should assume that the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing prospectus prepared by us or on our behalf is accurate only as of their respective dates or on the date or dates which are specified in such documents, and that any information in documents that we incorporate by reference is accurate only as of the date of such document incorporated by reference. Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates.
No action has been taken that would permit the offering, possession or distribution of this prospectus supplement in any jurisdiction where action for that purpose is required, other than in the United States. Persons who come into possession of this prospectus supplement and the accompanying prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions relating to the offering or the possession or distribution of this prospectus supplement and the accompanying prospectus applicable to that jurisdiction.
This document is in two parts. The first part is this prospectus supplement, which describes the terms of this offering of Class A common stock and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying prospectus. The second part, the accompanying prospectus, dated November 13, 2018, including the documents incorporated by reference therein, provides more general information. Generally, when we refer to this prospectus, we are referring to both parts of this document combined. To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus or in any document incorporated by reference that was filed with the SEC before the date of this prospectus supplement, on the other hand, you should rely on the information in this prospectus supplement. If any statement in one of these documents is inconsistent with a statement in another document having a later date (for example, a document incorporated by reference in this prospectus supplement or in the accompanying prospectus) the statement in the document having the later date modifies or supersedes the earlier statement.
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This summary highlights information contained elsewhere or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing prospectus prepared by us or on our behalf and does not contain all of the information you should consider before investing in shares of our Class A common stock. You should read this entire prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein carefully, including the section entitled Risk Factors and the financial statements and the related notes incorporated by reference into this prospectus supplement, the accompanying prospectus or any free writing prospectus prepared by us or on our behalf, before you decide to invest in shares of our Class A common stock.
Except where the context requires otherwise, all references in this prospectus supplement to BHGE and to the Company, we, us or our are to Baker Hughes, a GE company, and its consolidated subsidiaries. Except where the context requires otherwise, all references in this prospectus supplement to GE are to General Electric Company and its consolidated subsidiaries, except for Baker Hughes, a GE company and its consolidated subsidiaries.
Baker Hughes, a GE Company
We are the industrys only fullstream oilfield services company with an offering that spans the entire oil and gas value chain. We conduct business in more than 120 countries. We operate through our four business segments: Oilfield Services, Oilfield Equipment, Turbomachinery & Process Solutions, and Digital Solutions. Approximately 67,000 people were employed at our managed, owned and leased properties and corporate locations as of June 30, 2019.
For a description of our business, financial condition, results of operations and other important information regarding BHGE, we refer you to our filings with the SEC incorporated by reference in this prospectus supplement and the accompanying prospectus. For instructions on how to find copies of these documents, see Where You Can Find More Information.
The Combination of Baker Hughes Incorporated and GE Oil & Gas and Our Relationship with Baker
Hughes, a GE Company, LLC
On July 3, 2017, we completed the combination of the oil and gas business of GE (GE O&G) and Baker Hughes Incorporated (BHI) (such combination, the Combination Transactions), pursuant to which substantially all of the business of GE O&G and of BHI was transferred to BHGE LLC. The selling stockholders own all of our issued and outstanding Class B common stock. As of September 6, 2019, the GE Parties also owned approximately 50.2% of the LLC Units of BHGE LLC, and we (directly and indirectly through our wholly owned subsidiaries) owned approximately 49.8% of the LLC Units of BHGE LLC. BHGE LLC is the successor to BHI and is our indirect subsidiary.
GE, BHGE LLC and we entered into an exchange agreement, dated as of July 3, 2017 (the Exchange Agreement), pursuant to and subject to the terms of which the GE Parties have the right to surrender shares of our Class B common stock, together with associated LLC Units of BHGE LLC, in exchange for shares of Class A common stock on a one-to-one basis, subject to certain customary adjustments. The shares of Class A common stock included in this offering consist of 105,000,000 shares of Class A common stock to be issued to the selling stockholders in exchange for an equal number of shares of Class B common stock, together with an equal number of associated LLC Units of BHGE LLC. If the underwriters exercise their option to purchase additional shares in full, an additional 15,750,000 shares of Class A common stock will be issued to the selling stockholders in exchange for an equal number of shares of Class B common stock, together with an equal number of associated LLC Units of
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BHGE LLC. When shares of Class B common stock, together with associated LLC Units of BHGE LLC, are exchanged for shares of Class A common stock pursuant to the Exchange Agreement, such shares of Class B common stock will be cancelled and the associated LLC Units of BHGE LLC will be deemed transferred to the Company.
Organizational Structure
Following the Combination Transactions, we (directly and indirectly through our wholly owned subsidiaries) hold a minority economic interest in BHGE LLC. However, we conduct and exercise full control over all activities of BHGE LLC without the approval of any other member. Accordingly, we consolidate the financial results of BHGE LLC and report a noncontrolling interest in our consolidated and combined financial statements for the economic interest in BHGE LLC not held by us. GE holds its economic interest through the GE Parties ownership of the LLC Units of BHGE LLC. As noted above, as of September 6, 2019, the GE Parties and we (directly and indirectly through our wholly owned subsidiaries) held approximately 50.2% and 49.8%, respectively, of the LLC Units of BHGE LLC. Following this offering and the share repurchase described below, the GE Parties and we will hold approximately % and %, respectively, of the LLC Units of BHGE LLC (or approximately % and %, respectively, of the LLC Units of BHGE LLC assuming the underwriters exercise their option to purchase additional shares in full).
As a result of the sale of the shares in this offering, we will cease to be a controlled company within the meaning of the corporate governance standards of the NYSE and, as a result, will no longer continue to qualify for and rely on exemptions from certain corporate governance requirements, but may continue to qualify for, and rely on, certain transition-based exemptions from such corporate governance requirements. Although GE and its affiliates will no longer be a majority stockholder following the completion of this offering, pursuant to the provisions set forth in our charter, our bylaws and the Amended and Restated Stockholders Agreement, dated as of November 13, 2018, by and between us and GE, as amended from time to time, until GE and its affiliates own less than 20% of the voting power of all classes of our outstanding voting stock, GE is entitled to designate one person for nomination to our board of directors.
The Combination Transactions were conducted through what is commonly referred to as an Up-C structure, which allows the parties to achieve the economic equivalent of a consolidated tax group because BHGE LLC, which is considered the operating partnership for this purpose, is not itself subject to entity level tax. The below chart summarizes our organizational structure following this offering (including if the underwriters exercise their option to purchase additional shares in full) and the share repurchase described under Share Repurchase.
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Structure Following this Offering and the Share Repurchase
Share Repurchase
In connection with this offering, we have agreed to repurchase from one or more of the selling stockholders, in a privately negotiated transaction, $250,000,000 of shares of our Class B common stock, together with an equal number of associated LLC Units of BHGE LLC, at a price equal to the price per share at which the underwriters will purchase shares of our Class A common stock from the selling stockholders in this offering. This offering is not conditioned upon the completion of the share repurchase, but the share repurchase is conditioned upon the completion of this offering and will be completed immediately following the offering. Any shares of Class B common stock and associated LLC Units of BHGE LLC purchased in the share repurchase will be cancelled. The share repurchase has been unanimously approved by both the Conflicts Committee of our board of directors comprised of independent directors who are not affiliated with GE and by our board of directors. We intend to fund the share repurchase with cash on hand and other available sources of liquidity.
The description of, and the other information in this prospectus supplement regarding, the share repurchase are included in this prospectus supplement for informational purposes only. Nothing in this prospectus supplement should be construed as an offer to sell, or the solicitation of an offer to buy, any of our Class B common stock that we repurchase.
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Trigger Date
Upon the completion of this offering, GE and its affiliates will cease to hold more than 50% of the voting power of all classes of our outstanding voting stock. The completion of this offering will therefore constitute the Trigger Date under various agreements between BHGE and GE. Among other things, this will reduce the number of individuals who GE is entitled to designate to our board of directors from five to one. GE has informed us that it intends for John G. Rice to remain on our board of directors as its designee and for Jamie S. Miller and James J. Mulva to submit their resignations to the Conflicts Committee of our board of directors. Lorenzo Simonelli and W. Geoffrey Beattie are expected to continue to serve on our board of directors but not as GE designees. In addition, in connection with the completion of this offering, we intend to change our corporate name to Baker Hughes Company. Following the name change, our Class A common stock will trade on the NYSE under the symbol BKR. For other consequences of the Trigger Date, refer to our 2018 Annual Report on Form 10-K, including Note 18. Related Party Transactions of the Notes to Consolidated and Combined Financial Statements in Item 8 therein, and the other documents incorporated herein.
Recent Developments
While we have not completed our third quarter, given recent geopolitical and industry driven dynamics, timing of certain customer and supply chain driven events may modestly impact our third quarter results and shift into the fourth quarter. In connection with this offering and within the 20-40 basis point negative impact of the GE separation previously outlined, we expect to begin to incur increased separation expenses. Our expectations are forward looking, and you should not place undue reliance on these expectations. See Forward-Looking Statements.
Baker Hughes, a GE company was incorporated in Delaware in October 2016. Our principal executive offices are located at 17021 Aldine Westfield Road, Houston, Texas 77073, and our telephone number is (713) 439-8600. We maintain a website on the Internet at http://www.bhge.com. Information that you may find on our website is not part of this prospectus supplement and the inclusion of the website address in this prospectus supplement is an inactive textual reference only.
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The Offering
Class A common stock offered by the selling stockholders |
105,000,000 shares. |
Underwriters option to purchase additional shares of Class A common stock |
The underwriters have an option to purchase up to 15,750,000 additional shares of Class A common stock from the selling stockholders (the option to purchase additional shares). The underwriters can exercise this option at any time within 30 days from the date of this prospectus supplement. |
Share repurchase |
In connection with this offering, we have agreed to repurchase from one or more of the selling stockholders, in a privately negotiated transaction, $250,000,000 of shares of our Class B common stock, together with an equal number of associated LLC Units of BHGE LLC, at a price equal to the price per share at which the underwriters will purchase shares of our Class A common stock from the selling stockholders in this offering. This offering is not conditioned upon the completion of the share repurchase, but the share repurchase is conditioned upon the completion of this offering and will be completed immediately following the offering. Any shares of Class B common stock and associated LLC Units of BHGE LLC purchased in the share repurchase will be cancelled. The share repurchase has been unanimously approved by both the Conflicts Committee of our board of directors comprised of independent directors who are not affiliated with GE and by our board of directors. See Share Repurchase. |
Class A common stock outstanding after this offering and the share repurchase (1)(2) |
shares (or shares if the underwriters exercise their option to purchase additional shares in full) (or shares if each outstanding share of Class B common stock, together with the associated LLC Unit of BHGE LLC, were exchanged for one share of Class A common stock). |
Class B common stock outstanding after this offering and the share repurchase (2) |
shares (or shares if the underwriters exercise their option to purchase additional shares in full). When shares of Class B common stock, together with the associated LLC Units of BHGE LLC, are exchanged for shares of Class A common stock pursuant to the Exchange Agreement or purchased by us, such shares of Class B common stock will be cancelled and the associated LLC Units will be deemed transferred to the Company. Similarly, shares of Class B common stock and associated LLC Units of BHGE LLC that are repurchased in the share repurchase will be cancelled. |
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Use of proceeds |
We will not receive any of the proceeds from the sale of shares of our Class A common stock by the selling stockholders, including from any exercise by the underwriters of their option to purchase additional shares. |
Dividend policy |
Although we currently pay a quarterly cash dividend to holders of our Class A common stock, we have no obligation to do so, and our dividend policy may change at any time without notice to our stockholders. The declaration and payment of dividends is at the discretion of our board of directors in accordance with applicable law after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, limitations imposed by our indebtedness, legal requirements and other factors that our board of directors deems relevant. |
On August 2, 2019, our board of directors declared a cash dividend of $0.18 per share of our outstanding Class A common stock, payable on August 23, 2019 to holders of record on August 13, 2019. The purchasers of shares in this offering will not be entitled to receive this dividend. |
Risk factors |
Investing in our Class A common stock involves risks. You should carefully read and consider the Risk Factors beginning on page S-7 of this prospectus supplement and in our other filings with the SEC incorporated by reference in this prospectus supplement or the accompanying prospectus for a discussion of risks you should carefully consider before deciding to invest in our Class A common stock. |
Listing |
Our Class A common stock is listed on the NYSE under the symbol BHGE. |
(1) | The number of shares of Class A common stock that will be outstanding after this offering and the share repurchase as presented in this prospectus supplement is based on 516,890,143 shares of our Class A common stock outstanding as of September 6, 2019. The number of issued and outstanding shares of our Class A common stock as of September 6, 2019 excludes: |
| an aggregate of 13,659,257 shares issuable upon settlement of time-vesting and performance-vesting restricted stock units and restricted stock awards outstanding under our equity incentive plans as of such date; |
| an aggregate of approximately 8,772,940 shares issuable upon exercise of stock options outstanding under our equity incentive plans as of such date with a weighted-average exercise price of $32.42 per share; and |
| an aggregate of 35,230,028 shares reserved for future issuance under our equity incentive plans as of such date. |
(2) | The number of shares of Class B common stock that will be outstanding after this offering and the share repurchase as presented in this prospectus supplement is based on 521,543,095 shares of our Class B common stock outstanding as of September 6, 2019. |
Unless otherwise indicated, all information contained in this prospectus supplement assumes no exercise by the underwriters of their option to purchase up to an additional 15,750,000 shares of our Class A common stock.
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Investing in our Class A common stock involves risks. You should carefully consider the risks and uncertainties described below and the other information contained in or incorporated by reference into this prospectus supplement, including our Annual Report on Form 10-K for the year ended December 31, 2018 (the Annual Report) and Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2019 and the quarterly period ended June 30, 2019 (together, the Quarterly Reports). You should also carefully consider the other information contained or incorporated by reference in this prospectus supplement and in the accompanying prospectus before acquiring any shares of our Class A common stock. These risks could materially affect our business, results of operations or financial condition and cause the value of our Class A common stock to decline. You could lose all or part of your investment.
Following the completion of this offering, we will cease to be a controlled company within the meaning of the NYSE listing rules. However, we will continue to qualify for, and may rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to our stockholders during a 12-month phase-in period.
Following the completion of this offering, GE will cease to control a majority of the voting power of all classes of our outstanding voting stock. As a result, we will no longer be a controlled company as defined in the NYSE listing rules.
Under the listing rules, a company that ceases to be a controlled company must comply with the independent board committee requirements as they relate to the nominating and corporate governance and compensation committees on the following phase-in schedule: (1) one independent committee member at the time it ceases to be a controlled company, (2) a majority of independent committee members within 90 days of the date it ceases to be a controlled company and (3) all independent committee members within one year of the date it ceases to be a controlled company. Additionally, NYSE listing rules provide a 12-month phase-in period from the date a company ceases to be a controlled company to comply with the majority independent board requirement. Although we believe we would be able to modify our board and committee structure in a timely manner, during these phase-in periods our stockholders may not have the same protections afforded to stockholders of companies subject to full NYSE listing requirements. Furthermore, a change in our board of directors and committee membership may result in a change in corporate strategy and operation philosophies, and may result in deviations from our current strategy. The Company is a party to a tax matters agreement (the Tax Matters Agreement) with GE. Under the Tax Matters Agreement, the Company could, under certain circumstances, be entitled to receive tax benefits in connection with the sale by GE of its equity interests in the Company. However, there is no assurance that the Company will realize any such benefits.
Although we no longer will be a controlled company after the completion of this offering, GE and its affiliates will continue to own approximately % (or % assuming the underwriters exercise their option to purchase additional shares in full) of the voting power of all classes of our outstanding voting stock, and the interests of GE may differ from the interests of other stockholders of the Company.
Although GE and its affiliates will no longer be a majority stockholder after the completion of this offering, GE may still exercise significant influence over matters submitted to our stockholders for approval through its ownership of our Class B common stock representing approximately % (or % assuming the underwriters exercise their option to purchase additional shares in full) of the voting power of all classes of our outstanding voting stock. GE may also have influence over matters that do not require stockholder approval. GE may have different interests than other holders of our common stock on these and other matters which may affect our operational and financial decisions. Among other things, GEs influence could delay, defer, or prevent a sale of the Company that other stockholders support, or, conversely, this influence could result in the consummation of such a transaction that other stockholders do not support. This concentrated influence could discourage a potential investor from seeking to acquire Class A common stock and, as a result, might harm the market price of that Class A common stock.
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In addition, pursuant to the provisions set forth in our charter, our bylaws and the Amended and Restated Stockholders Agreement, dated as of November 13, 2018, by and between us and GE, as amended from time to time, the number of individuals who GE is entitled to designate to our board of directors will be reduced from five to one. GE has informed us that it intends for John G. Rice to remain on our board of directors as its designee. Lorenzo Simonelli and W. Geoffrey Beattie are also expected to continue to serve on our board of directors but not as GE designees. GE will continue to be entitled to designate one person for nomination to our board of directors until such time as GE and its affiliates own less than 20% of the voting power of all classes of our outstanding voting stock.
Although, following the completion of this offering, we will no longer be controlled by GE, our success will remain partially dependent on GE through, among other things, our reliance on the long-term agreements and transition services agreements between the Company and GE and the public perception of our affiliation with GE.
Following the completion of this offering, we will no longer be a majority-owned subsidiary of GE, and the separation from GE could adversely affect our business, financial condition and results of operations.
We market many of our products and services using the GE brand name and logo. GE has licensed to us the right to use certain GE marks in our corporate name and on the products and services of our business in connection with certain oil and gas activities and other discrete oil and gas segments. The agreements granting the rights to use those marks will terminate 90 days after we cease being a majority-owned subsidiary of GE (subject to certain phase-out provisions). As a consequence of such termination, we will be required to remove the GE marks from our corporate name, products and services over a prescribed period of time (subject to phase-out provisions). Upon completion of this offering, we intend to change our corporate name to Baker Hughes Company. Following the name change, our Class A common stock will trade on the New York Stock Exchange under the symbol BKR.
While the association with GE provides many benefits, including a strong brand, broad research and development capabilities, elevated status with suppliers and customers, and established relationships with regulators, consistent with our planned name change, we intend to rebrand our business and products or pursue alternative marketing strategies, which could adversely affect our ability to attract new customers or maintain existing business relationships with customers, suppliers and other business partners, all of which could have a material adverse effect on our business, financial condition and results of operations.
In addition, following the completion of this offering, we will no longer be a majority-owned subsidiary of GE, which could adversely affect, among other things, our ability to attract and retain customers. We may be required to provide more favorable pricing and other terms to our customers and take other action to maintain our relationship with existing customers and attract new customers, all of which could have a material adverse effect on our business, financial condition and results of operations. The separation from GE has created, and may continue to create, uncertainty among our customers, suppliers, and other business partners. The potential uncertainty due to the separation or other factors may undermine our business and have a material adverse effect on our financial condition and results of operations, and may cause increased volatility and wide price fluctuations in our stock price.
The market price of our Class A common stock could be materially impacted due to the substantial number of shares of our capital stock eligible for sale in this offering and in any future offerings by GE.
As of September 6, 2019, 516,890,143 shares of our Class A common stock were outstanding (or 1,038,433,238 shares of Class A common stock assuming the full exchange of all outstanding shares of Class B common stock pursuant to the Exchange Agreement). The selling stockholders are offering 105,000,000 shares (or 120,750,000 shares if the underwriters exercise their option to purchase additional shares in full) of Class A
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common stock in this offering. The substantial number of shares of our Class A common stock eligible for sale in this offering could substantially decrease the market price of our Class A common stock.
In addition, the large number of shares of our Class A common stock eligible for sale by GE in the future could cause the market price of our Class A common stock to substantially decrease. GE and its affiliates owned approximately 50.2% percent of our outstanding Class A common stock as of September 6, 2019 and, after giving effect to this offering (including the exercise in full of the underwriters option to purchase additional shares) and the share repurchase, would have owned approximately % of our outstanding Class A common stock (in each case assuming full exchange of its shares of Class B common stock pursuant to the Exchange Agreement). Pursuant to the Amended and Restated Registration Rights Agreement, dated July 31, 2019, as further amended from time to time, GE has the right to cause us, in certain instances, at our expense, to register resales of our Class A common stock held by GE under the Securities Act. These shares also may be sold pursuant to Rule 144 under the Securities Act, subject to restrictions while GE is deemed to be our affiliate. Future sales of a substantial number of shares of our Class A common stock in the public market, or the perception that these sales could occur, could substantially decrease the market price of our Class A common stock. We cannot assure you if or when any future offerings or resales of these shares may occur.
The market price and trading volume of our Class A common stock may be volatile, which could result in rapid and substantial losses for our stockholders.
The market price of our Class A common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our Class A common stock may fluctuate and cause significant price variations to occur. If the market price of our Class A common stock declines significantly, you may be unable to sell your shares of our Class A common stock at or above your purchase price, if at all. We cannot assure you that the market price of our Class A common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect the price of our Class A common stock or result in fluctuations in the price or trading volume of our Class A common stock include: variations in our quarterly operating results; failure to meet our earnings estimates; publication of research reports about us or our industry or the failure of securities analysts to cover our Class A common stock after the offering; additions or departures of our executive officers and other key management personnel; adverse market reaction to any indebtedness we may incur or securities we may issue in the future; actions by stockholders; offerings of our Class A common stock by GE or its affiliates or the perceived possibility of such offerings; changes in market valuations of similar companies; speculation in the press or investment community; changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; adverse publicity about our industry generally or individual scandals, specifically; and general market and economic conditions.
Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
Our amended and restated certificate of incorporation and amended and restated bylaws may delay or prevent a merger or acquisition that a stockholder may consider favorable by permitting our board of directors to issue one or more series of preferred stock, requiring advance notice for stockholder proposals and nominations, and placing limitations on convening stockholder meetings. These provisions may also discourage acquisition proposals or delay or prevent a change in control, which could harm our stock price.
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We have made in this prospectus supplement, in the accompanying prospectus and in the documents incorporated herein by reference, and may from time to time otherwise make in other public filings, press releases and discussions with our management, forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements, other than historical facts, including statements regarding the presentation of our operations in future reports and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words may, will, should, potential, intend, expect, endeavor, seek, anticipate, estimate, overestimate, underestimate, believe, could, project, predict, continue, target or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved.
Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, the risk factors identified in the Risk Factors section of this prospectus supplement, the Annual Report, the Quarterly Reports and those set forth from time-to-time in other filings by BHGE with the SEC. These documents are available through our website or through the SECs Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov. Information that you may find on our website is not part of this prospectus and the inclusion of the website address in this prospectus is an inactive textual reference only.
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The following table sets forth information regarding the GE Parties combined ownership of shares of our Class A and Class B common stock as of September 6, 2019, before and after giving effect to this offering and share repurchase described in SummaryShare Repurchase. In connection with this offering, we have agreed to repurchase from one or more of the selling stockholders, in a privately negotiated transaction, $250,000,000 of shares of our Class B common stock, together with an equal number of associated LLC Units of BHGE LLC, at a price equal to the price per share at which the underwriters will purchase shares of our Class A common stock from the selling stockholders in this offering. This offering is not conditioned upon the completion of the share repurchase, but the share repurchase is conditioned upon the completion of this offering and will be completed immediately following the offering. The share repurchase has been unanimously approved by both the Conflicts Committee of our board of directors comprised of independent directors who are not affiliated with GE and by our board of directors.
For more information about our relationship with the selling stockholders, see Certain Relationships and Related Party Transactions in our Definitive Proxy Statement on Form 14A, filed with the SEC on March 25, 2019, which is incorporated herein by reference.
Shares Beneficially Owned Before the Offering and Share Repurchase |
Shares Beneficially Owned After the Offering and Share Repurchase (assuming no exercise of the underwriters option to purchase additional shares) |
Shares Beneficially Owned After the Offering and Share Repurchase (assuming exercise of the underwriters option to purchase additional shares in full) |
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Class A Common Stock(1) |
Class B Common Stock |
Combined Voting Power(2) |
Class A Common Stock(1) |
Class B Common Stock |
Combined Voting Power(2) |
Class A Common Stock(1) |
Class B Common Stock |
Combined Voting Power(2) |
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Number | % | Number | % | Number | % | Number | % | Number | % | Number | % | Number | % | Number | % | Number | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
GE Parties(3) |
| | 521,543,095 | 100 | 521,543,095 | 50.2 | | | | |
(1) | Does not include shares of Class A common stock issuable upon exchange of Class B common stock pursuant to the Exchange Agreement. |
(2) | Represents the percentage of voting power of our Class A common stock and Class B common stock voting together as a single class. Each share of Class B common stock entitles its holder to one vote. |
(3) | The shares to be sold by the GE Parties pursuant to any exercise of the underwriters option and the share repurchase may come from GE or another GE Party. After giving effect to (i) the sale of 105,000,000 shares of Class A common stock by the selling stockholders in this offering (assuming the underwriters option is not exercised) and (ii) the share repurchase, GE, GE Oil & Gas US Holdings IV, Inc. (GE O&G US Holdings IV) and GE Holdings (US), Inc. (GE Holdings US) will cease to directly hold any shares of Class B common stock; GE Investments, LLC (GE Investments) will cease to indirectly hold any shares of our Class B common stock; and GE Oil & Gas US Holdings I, Inc. (GE O&G US Holdings I) will directly hold shares of our Class B common stock. GE is a corporation incorporated under the laws of the State of New York. The principal business of GE is providing global diversified infrastructure and financial services. The principal business address and principal office address of GE is 41 Farnsworth Street, Boston, Massachusetts 02210. GE Investments, a corporation incorporated under the laws of the State of Delaware, is a holding company. The principal business address and principal office address of GE Investments is 901 Main Avenue, Norwalk, Connecticut 06851-1168. GE O&G US Holdings IV, a corporation incorporated under the laws of the State of Delaware, is a holding company. The principal business address and principal office address of GE O&G US Holdings IV is 191 Rosa Parks Street, Cincinnati, Ohio 45202. GE Holdings US, a corporation incorporated under the laws of the State of Delaware, is a holding company. The principal business address and principal office address of GE Holdings US is 901 Main Avenue, Norwalk, Connecticut 06851-1168. GE O&G US Holdings I, a corporation incorporated under the laws of the State of Delaware, is a holding company. The principal business address and principal office address of GE O&G US Holdings I is 191 Rosa Parks Street, Cincinnati, Ohio 45202. |
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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES FOR NON-U.S. HOLDERS
The following are the material U.S. federal income tax consequences of the ownership and disposition of our Class A common stock acquired in this offering by a Non-U.S. Holder that does not own, and has not owned, actually or constructively, more than 5% of our Class A common stock. You are a Non-U.S. Holder if for U.S. federal income tax purposes you are a beneficial owner of our Class A common stock that is:
| a nonresident alien individual; |
| a foreign corporation; or |
| a foreign estate or trust. |
You are not a Non-U.S. Holder if you are a nonresident alien individual present in the United States for 183 days or more in the taxable year of disposition, or if you are a former citizen or former resident of the United States for U.S. federal income tax purposes. If you are such a person, you should consult your tax adviser regarding the U.S. federal income tax consequences of the ownership and disposition of our Class A common stock.
If you are a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and your activities. A partner in a partnership holding our Class A common stock should consult its tax adviser regarding the U.S. federal income tax consequences of the ownership and disposition of our Class A common stock.
This discussion is based on the Internal Revenue Code of 1986, as amended to the date hereof (the Code), administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, changes to any of which subsequent to the date of this prospectus supplement may affect the tax consequences described herein, possibly with retroactive effect. This discussion does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including alternative minimum tax and Medicare contribution tax consequences and does not address any aspect of state, local or non-U.S. taxation, or any taxes other than income taxes. You should consult your tax adviser with regard to the application of the U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
Dividends
Distributions of cash or other property will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed our current and accumulated earnings and profits, they will constitute a return of capital, which will first reduce your basis in our Class A common stock, but not below zero, and then will be treated as gain from the sale of our Class A common stock, as described below under Gain on Disposition of Our Class A Common Stock.
Dividends paid to you generally will be subject to withholding tax at a 30% rate or a reduced rate specified by an applicable income tax treaty. In order to obtain a reduced rate of withholding, you will be required to provide a properly executed applicable Internal Revenue Service (IRS) Form W-8 certifying your entitlement to benefits under a treaty.
If dividends paid to you are effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base maintained by you in the United States), you will generally be taxed on the dividends in the same manner as a U.S. person. In this case, you will be exempt from the withholding tax discussed in the preceding paragraph, although you will be required to provide a properly executed IRS Form W-8ECI in order to claim an exemption
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from withholding. You should consult your tax adviser with respect to other U.S. tax consequences of the ownership and disposition of our Class A common stock, including the possible imposition of a branch profits tax at a rate of 30% (or a lower treaty rate) if you are a corporation.
Gain on Disposition of Our Class A Common Stock
Subject to the discussions below under Information Reporting and Backup Withholding and FATCA, you generally will not be subject to U.S. federal income or withholding tax on gain realized on a sale or other taxable disposition of our Class A common stock unless:
| the gain is effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base maintained by you in the United States), or |
| we are or have been a United States real property holding corporation, as defined in the Code, at any time within the five-year period preceding the disposition or your holding period, whichever period is shorter, and our Class A common stock has ceased to be regularly traded on an established securities market prior to the beginning of the calendar year in which the sale or disposition occurs. |
We believe that we are not, and do not anticipate becoming, a United States real property holding corporation.
If you recognize gain on a sale or other disposition of our Class A common stock that is effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base maintained by you in the United States), you will generally be taxed on such gain in the same manner as a U.S. person. You should consult your tax adviser with respect to other U.S. tax consequences of the ownership and disposition of our Class A common stock, including the possible imposition of a branch profits tax at a rate of 30% (or a lower treaty rate) if you are a corporation.
Information Reporting and Backup Withholding
Information returns are required to be filed with the IRS in connection with payments of dividends on our Class A common stock. Unless you comply with certification procedures to establish that you are not a U.S. person, information returns may also be filed with the IRS in connection with the proceeds from a sale or other disposition of our Class A common stock. You may be subject to backup withholding on payments on our Class A common stock or on the proceeds from a sale or other disposition of our Class A common stock unless you comply with certification procedures to establish that you are not a U.S. person or otherwise establish an exemption. Your provision of a properly executed applicable IRS Form W-8 certifying your non-U.S. status will permit you to avoid backup withholding. Amounts withheld under the backup withholding rules are not additional taxes and may be refunded or credited against your U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
FATCA
Provisions of the Code commonly referred to as FATCA require withholding of 30% on payments of dividends on our Class A common stock, as well as of gross proceeds of dispositions of our Class A common stock, to foreign financial institutions (which is broadly defined for this purpose and in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied, or an exemption applies. Under recently proposed regulations, the preamble to which states that taxpayers may rely on the proposed regulations until final regulations are issued, this withholding tax will not apply to the gross proceeds from the sale or other disposition of our Class A common
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stock. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. If FATCA withholding is imposed, a beneficial owner that is not a foreign financial institution generally may obtain a refund of any amounts withheld by filing a U.S. federal income tax return (which may entail significant administrative burden). You should consult your tax adviser regarding the effects of FATCA on your investment in our Class A common stock.
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Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus supplement, the underwriters named below, for whom J.P. Morgan Securities LLC is acting as representative, have severally agreed to purchase, and the selling stockholders have agreed to sell to them, the number of shares of Class A common stock indicated below:
Name |
Number of Shares | |||
J.P. Morgan Securities LLC |
||||
Citigroup Global Markets Inc. |
||||
Goldman Sachs & Co. LLC |
||||
Morgan Stanley & Co. LLC |
||||
BofA Securities, Inc. |
||||
BNP Paribas Securities Corp. |
||||
Evercore Group L.L.C. |
||||
|
|
|||
Total |
105,000,000 | |||
|
|
The underwriters and the representative are collectively referred to as the underwriters and the representative, respectively. The underwriters are offering the shares of Class A common stock subject to their acceptance of the shares from the selling stockholders and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of our Class A common stock offered by this prospectus supplement and the accompanying prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the shares of our Class A common stock offered by this prospectus supplement if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters option to purchase additional shares described below.
The underwriters initially propose to offer part of the shares of our Class A common stock directly to the public at the offering price listed on the cover page of this prospectus supplement (the Public Offering Price) and part to certain dealers at a price that represents a concession not in excess of $ per share under the Public Offering Price. After the initial offering of the shares of Class A common stock, the offering price and other selling terms may from time to time be varied by the representative. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters right to reject any order in whole or in part.
The selling stockholders have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus supplement, to purchase up to 15,750,000 additional shares of our Class A common stock at the Public Offering Price, less underwriting discounts and commissions. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional shares of our Class A common stock as the number listed next to the underwriters name in the preceding table bears to the total number of shares of our Class A common stock listed next to the names of all underwriters in the preceding table.
The following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before expenses to the selling stockholders. These amounts are shown assuming both no exercise and full exercise of the underwriters option to purchase up to an additional 15,750,000 shares of our Class A common stock.
Total | ||||||||||||
Per Share |
No Exercise |
Full Exercise |
||||||||||
Public offering price |
$ | $ | $ | |||||||||
Underwriting discounts and commissions to be paid by the selling stockholders |
$ | $ | $ | |||||||||
Proceeds, before expenses, to the selling stockholders |
$ | $ | $ |
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We estimate that the total expenses of this offering payable by us, including offering, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $ million.
The underwriters have informed us that they do not intend sales to discretionary accounts to exceed 5% of the total number of shares of our Class A common stock offered by them.
Our Class A common stock is listed on the NYSE under the trading symbol BHGE.
We, our directors and officers, and GE, on behalf of itself and its subsidiaries (other than BHGE and its subsidiaries), have agreed that, without the prior written consent of the representative on behalf of the underwriters, we and they will not, during the period ending 90 days after the date of this prospectus supplement (the restricted period):
| offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of any class of stock of BHGE or any limited liability company units or other membership interests of BHGE LLC (collectively, restricted securities) or any other securities convertible into or exercisable or exchangeable for any restricted securities; |
| in the case of the Company, GE and the subsidiaries of GE, file any registration statement with the SEC relating to the offering of any restricted securities or any securities convertible into or exercisable or exchangeable for any restricted securities; |
| enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any restricted securities, whether any such transaction is to be settled by delivery of restricted securities or such other securities, in cash or otherwise; or |
| make certain public announcements with respect to any of the foregoing transactions. |
In addition, GE, on behalf of itself and its subsidiaries (other than BHGE and its subsidiaries), has agreed that, without the prior written consent of the representative on behalf of the underwriters, GE will not, during the restricted period, make any demand for, or exercise any right with respect to, the registration of any restricted securities or any security convertible into or exercisable or exchangeable for restricted securities if such demand or exercise would result in a public announcement or filing during the restricted period.
The restrictions described in the immediately preceding paragraph are subject to certain exceptions, including for:
| the sale of shares to the underwriters; |
| the share repurchase; |
| certain transactions by any person other than us relating to the restricted securities or other securities acquired in open-market transactions after the completion of the offering of the shares; |
| the exchange of shares of Class B common stock, together with associated LLC Units of BHGE LLC, for shares of Class A common stock pursuant to the Exchange Agreement; |
| the issuance by us of shares of our common stock or securities convertible into such shares in connection with acquisitions or business combinations; provided that the aggregate number of such shares issued during the restricted period does not exceed 5% of our outstanding stock (after giving effect to this offering) and the recipients agree to restrictions with respect to such shares and securities similar to those applicable to our directors and officers; |
| transfers by GE and its subsidiaries pursuant to an unsolicited third-party tender offer, merger, consolidation, stock exchange or similar transaction pursuant to which any person or group of persons becomes the beneficial owner of at least 75% of our voting stock; |
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| certain transfers by GE and its subsidiaries; provided the transferees agree to restrictions with respect to such restricted securities similar to those applicable to GE; |
| certain transfers by GE and its subsidiaries to us or our subsidiaries; |
| certain transactions by our directors and officers under our existing equity compensation plans or pursuant to existing trading plans pursuant to Rule 10b5-1 under the Exchange Act; |
| transfers by certain of our directors and officers of up to 30,000 shares, in aggregate, of our Class A common stock; |
| the issuance by us of options to purchase shares of our common stock and other equity incentive compensation under our existing equity compensation plans, the filing by us of registration statements relating to offerings of securities under our existing equity compensation plans and the issuance by us of shares of Class A common stock upon the exercise of options granted pursuant to our existing equity compensation plans; or |
| the establishment by any person other than us of a trading plan pursuant to Rule 10b5-1 under the Exchange Act, provided that (i) such plan does not provide for the transfer of restricted securities during the restricted period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required or voluntarily made regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of restricted securities may be made under such plan during the restricted period. |
The representative, in its sole discretion, may release the restricted securities and other securities subject to the lock-up agreements described above in whole or in part at any time.
In order to facilitate the offering of our Class A common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our Class A common stock. Specifically, the underwriters may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the option to purchase additional shares. The underwriters can close out a covered short sale by exercising the option or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the option. The underwriters may also sell shares in excess of the option, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our Class A common stock in the open market after pricing that could adversely affect investors who purchase in this offering. As an additional means of facilitating this offering, the underwriters may bid for, and purchase, shares of common stock in the open market to stabilize the price of our Class A common stock. These activities may raise or maintain the market price of our Class A common stock above independent market levels or prevent or retard a decline in the market price of our Class A common stock. The underwriters are not required to engage in these activities and may end any of these activities at any time.
We, the selling stockholders and the underwriters have agreed to indemnify each other against certain liabilities, including certain liabilities under the Securities Act.
A prospectus supplement in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in this offering. The representative may agree to allocate a number of shares of common stock to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representative to underwriters that may make Internet distributions on the same basis as other allocations.
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Other Relationships
The underwriters and their respective affiliates are full-service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us and/or the selling stockholders, for which they received or will receive customary fees and expenses. For example, affiliates of certain of the underwriters act as administrative agents and/or lenders under the Companys and GEs revolving credit facilities and have received customary fees and expenses in connection therewith. Commitments and borrowings, and corresponding fees payable to the administrative agents and lenders, under GEs revolving credit facilities will be reduced in the event of certain sales by GE and its affiliates of common stock of the Company. In addition, affiliates of J.P. Morgan Securities LLC acted as financial advisor to the Company in the negotiations of the Master Agreement and related ancillary agreements and binding term sheets entered into between the Company and GE on November 13, 2018 and other long-term agreements between the Company and GE.
In addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our and/or the selling stockholders securities and instruments. The underwriters and their respective affiliates may also make investment recommendations or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long or short positions in such securities and instruments.
Selling Restrictions
Canada
The shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchasers province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchasers province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
European Economic Area
In relation to each Member State of the European Economic Area (each a Member State), no shares of our Class A common stock have been offered or will be offered to the public in that Member State, except that offers
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of shares of our Class A common stock may be made to the public in that Member State at any time under the following exemptions under the Prospectus Regulation:
(a) to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
(b) to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the representative; or
(c) in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of our Class A common stock shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation and each person who initially acquires any shares of our Class A common stock or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with each of the underwriters and the Company that it is a qualified investor within the meaning of Article 2(e) of the Prospectus Regulation. In the case of any shares of our Class A common stock being offered to a financial intermediary as that term is used in the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares of our Class A common stock acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any shares of our Class A common stock to the public other than their offer or resale in a Member State to qualified investors as so defined or in circumstances in which the prior consent of the representative has been obtained to each such proposed offer or resale.
For the purposes of this provision, the expression an offer to the public in relation to any shares of our Class A common stock in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of our Class A common stock to be offered so as to enable an investor to decide to purchase or subscribe for any shares of our Class A common stock, and the expression Prospectus Regulation means Regulation (EU) 2017/1129.
United Kingdom
Each underwriter has represented and agreed that:
(a) | it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (FSMA) received by it in connection with the issue or sale of the shares of our Class A common stock in circumstances in which Section 21(1) of the FSMA does not apply to us; and |
(b) | it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares of our Class A common stock in, from or otherwise involving the United Kingdom. |
France
Neither this prospectus supplement nor any other offering material relating to the shares of Class A common stock offered by this prospectus supplement has been and will not be submitted to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The shares of Class A common stock have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus supplement nor any other offering material relating to the shares of Class A common stock has been or will be:
(a) | released, issued, distributed or caused to be released, issued or distributed to the public in France; or |
(b) | used in connection with any offer for subscription or sale of the shares to the public in France. |
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Such offers, sales and distributions will be made in France only:
(a) | to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint dinvestisseurs), in each case acting for their own account, or otherwise in circumstances in which no offer to the public occurs, all as defined in and in accordance with Articles L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier; |
(b) | to investment services providers authorized to engage in portfolio management on behalf of third parties; or |
(c) | in a transaction that, in accordance with Article L.411-2-I-1° -or-2° -or 3° of the French Code monétaire et financier and Article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (offre au public). |
The shares may not be distributed directly or indirectly to the public except in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier and applicable regulations thereunder.
Hong Kong
The shares of Class A common stock offered by this prospectus supplement have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (a) to professional investors as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a prospectus as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document relating to the shares has been or may be issued or has been or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.
Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares of Class A common stock offered by this prospectus supplement may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the SFA), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (i) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (ii) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.
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Japan
No registration pursuant to Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) (the FIEL) has been made or will be made with respect to the solicitation of the application for the acquisition of the shares of our Class A common stock offered by this prospectus supplement.
Accordingly, the shares of our Class A common stock have not been, directly or indirectly, offered or sold and will not be, directly or indirectly, offered or sold in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements, and otherwise in compliance with, the FIEL and the other applicable laws and regulations of Japan.
Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission, or ASIC, in relation to the offering. This prospectus supplement does not constitute a prospectus, product disclosure statement or other disclosure document under the prospectus, product disclosure statement or other disclosure document under the Corporations Act. Any offer in Australia of the shares of our Class A common stock offered by this prospectus supplement may only be made to persons (the Exempt Investors) who are sophisticated investors (within the meaning of section 708(8) of the Corporations Act), professional investors (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares of our Class A common stock without disclosure to investors under Chapter 6D of the Corporations Act. The shares of our Class A common stock applied for by Exempt Investors in Australia must not be offered for sale in Australia for a period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions. This prospectus supplement contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus supplement is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
Dubai International Financial Centre
This prospectus supplement relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority, or DFSA. This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus supplement. The shares of our Class A common stock to which this prospectus supplement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus supplement you should consult an authorized financial advisor.
Switzerland
The shares of our Class A common stock offered by this prospectus supplement may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange or
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regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland. Neither this document nor any other offering or marketing material relating to the offering, us or the shares of our Class A common stock have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and any offers of shares of our Class A common stock have not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or CISA. The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.
China
This prospectus supplement does not constitute a public offer of shares, whether by sale or subscription, in the Peoples Republic of China (the PRC). The shares are not being offered or sold directly or indirectly in the PRC to or for the benefit of legal or natural persons of the PRC. Further, no legal or natural persons of the PRC may directly or indirectly purchase any of the shares or any beneficial interest therein without obtaining all prior PRC governmental approvals that are required, whether statutorily or otherwise. Persons who come into possession of this document are required by the issuer and its representatives to observe these restrictions.
United Arab Emirates
The shares have not been, and are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates (including the Dubai International Financial Centre) other than in compliance with the laws of the United Arab Emirates (and the Dubai International Financial Centre) governing the issue, offering and sale of securities. Further, this prospectus supplement does not constitute a public offer of securities in the United Arab Emirates (including the Dubai International Financial Centre) and is not intended to be a public offer. This prospectus supplement has not been approved by or filed with the Central Bank of the United Arab Emirates, the Securities and Commodities Authority or the Dubai Financial Services Authority.
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Certain legal matters will be passed upon for us by Davis Polk & Wardwell LLP, New York, New York. The selling stockholders have been represented in connection with this offering by Shearman & Sterling LLP, New York, New York. Certain legal matters will be passed upon for the underwriters by Cravath, Swaine & Moore LLP, New York, New York.
The consolidated and combined financial statements of Baker Hughes, a GE company as of December 31, 2018 and 2017, and for each of the years in the two-year period ended December 31, 2018, and managements assessment of the effectiveness of internal control over financial reporting as of December 31, 2018, included in BHGEs Annual Report on Form 10-K for the year ended December 31, 2018 have been incorporated by reference herein, in reliance upon the reports of KPMG LLP, independent registered public accounting firm, dated February 19, 2019, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2018 and 2017 consolidated and combined financial statements refers to a change in the Companys method of accounting for revenue recognition in 2018 due to the adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers, discussed in Note 1 to the consolidated and combined financial statements.
The combined financial statements for the year ended December 31, 2016 included from BHGEs Annual Report on Form 10-K for the year ended December 31, 2018 have been incorporated by reference herein in reliance upon the report of KPMG S.p.A., independent registered public accounting firm, dated March 16, 2017, except as to Note 17, which is as of December 4, 2017 and Note 1, which is as of November 13, 2018, which is incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2016 combined financial statements refers to a change in the Companys method of accounting for revenue recognition in 2018 due to the adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers, discussed in Note 1 to the combined financial statements.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus supplement and the accompanying prospectus are part of the registration statement on Form S-3 we filed with the SEC under the Securities Act and do not contain all the information set forth in the registration statement. Whenever a reference is made in this prospectus supplement or the accompanying prospectus to any of our contracts, agreements or other documents, the reference may not be complete and you should refer to the exhibits that are a part of the registration statement or the exhibits to the reports or other documents incorporated by reference in this prospectus supplement and the accompanying prospectus for a copy of such contract, agreement or other document. Because we are subject to the information and reporting requirements of the Exchange Act, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SECs website at http://www.sec.gov.
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INFORMATION INCORPORATED BY REFERENCE
The SECs rules allow us to incorporate by reference information into this prospectus supplement and the accompanying prospectus. This means that we can disclose important information to you by referring you to another document. The information incorporated by reference is considered to be a part of this prospectus supplement and the accompanying prospectus. This prospectus supplement incorporates by reference the documents listed below (File No. 001-38143):
| Annual Report on Form 10-K for the year ended December 31, 2018 filed by the Company with the SEC on February 19, 2019; |
| Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019 filed by the Company with the SEC on April 30, 2019 and for the quarter ended June 30, 2019 filed by the Company with the SEC on August 1, 2019; |
| The portions of the Definitive Proxy Statement on Schedule 14A filed by the Company with the SEC on March 25, 2019 (the Proxy Statement) that were incorporated by reference into Part III of the Annual Report; |
| Current Reports on Form 8-K, filed by the Company with the SEC on February 5, 2019, February 28, 2019, May 13, 2019 and June 28, 2019; |
| The descriptions of the Companys Class A common stock and preferred stock contained in the sections entitled Description of New Baker Hughes Capital StockNew Baker Hughes Common Stock and Description of New Baker Hughes Capital StockNew Baker Hughes Preferred Stock in the Amendment No. 2 to the Registration Statement on Form S-4/A filed by the Company with the SEC on May 25, 2017 (the S-4 Registration Statement) including any amendments or reports filed for the purpose of updating such description; and |
| All other documents filed by us under sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus supplement and before the termination of the offering to which this prospectus supplement relates (other than documents and information furnished and not filed in accordance with SEC rules, unless expressly stated otherwise therein). |
This prospectus supplement, the accompanying prospectus and the information incorporated by reference herein contain descriptions and summaries of certain documents that we have filed with the SEC. These descriptions and summaries do not purport to be complete and are qualified in their entirety by reference to such documents. Copies of such documents can be obtained by following the procedures described below.
Any statement contained in a document incorporated or considered to be incorporated by reference in this prospectus supplement or the accompanying prospectus will be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained in this prospectus supplement or in any subsequently filed information that is or is considered to be incorporated by reference modifies or supersedes that statement. Any statement so modified or superseded will be deemed not to, except as so modified or superseded, constitute a part of this prospectus supplement and the accompanying prospectus.
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You can obtain any of the filings incorporated by reference into this prospectus supplement and the accompanying prospectus through us or from the SEC through the SECs website at http://www.sec.gov. We will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus supplement or the accompanying prospectus is delivered, upon written or oral request of such person, a copy of any or all of the reports and documents referred to above which have been or may be incorporated by reference into this prospectus supplement or the accompanying prospectus. You should direct requests for those documents to:
Baker Hughes, a GE company
Attention: Corporate Secretary
17021 Aldine Westfield Road
Houston, Texas 77073
(713) 439-8600
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PROSPECTUS
Baker Hughes, a GE company
Class A Common Stock
Preferred Stock
Debt Securities
Guarantees of Debt Securities
Purchase Contracts
Units
Baker Hughes, a GE company (BHGE) may offer from time to time its debt securities, guarantees of debt securities, Class A common stock, par value $0.0001 per share (the Class A common stock), preferred stock, par value $0.0001 per share (the preferred stock), purchase contracts and units from time to time, in one or more offerings, in amounts, at prices and on terms determined at the time of such offering. In addition, selling security holders may be identified in supplements to this prospectus and may offer and sell these securities from time to time.
This prospectus describes some of the general terms that may apply to these securities and the general manner in which they may be offered. The specific terms of any securities to be offered, and the specific manner in which they may be offered, will be described in a supplement to this prospectus and, if applicable, in the information incorporated by reference in this prospectus and related free writing prospectuses at the time of offering. You should read this prospectus, each applicable prospectus supplement, the information incorporated by reference, and any related free writing prospectuses carefully before you make your investment decision.
Our Class A common stock is listed on the New York Stock Exchange under the symbol BHGE.
Investing in our securities involves risks. Before buying our securities, you should carefully read and consider the risks we describe in this prospectus and in any accompanying prospectus supplement, as well as the risk factors that are incorporated by reference into this prospectus and in any accompanying prospectus supplement from our filings made with the Securities and Exchange Commission. See the section entitled Risk Factors on page 7 of this prospectus.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is November 13, 2018.
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This prospectus is part of an automatic shelf registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or the SEC, as a well-known seasoned issuer, as defined under Rule 405 under the Securities Act of 1933, or the Securities Act. Under this shelf registration process, we or any selling security holders to be named in a prospectus supplement may, from time to time, offer or sell any combination of the securities described in this prospectus in one or more offerings in amounts, at prices and on terms that will be determine at the time of the offering.
This prospectus provides you with a general description of the securities that we or any selling security holders to be named in a prospectus supplement may offer. You should read both this prospectus and any prospectus supplement together with any related free writing prospectuses and the additional information described under the heading Where You Can Find More Information below. We have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should assume that the information contained in or incorporated by reference in this prospectus, any prospectus supplement or any such free writing prospectus is accurate only as of their respective dates or on the date or dates which are specified in such documents, and that any information in documents that we incorporate by reference is accurate only as of the date of such document incorporated by reference.
Unless the context requires otherwise or unless otherwise noted, all references in this prospectus or any prospectus supplement to BHGE and to the registrant, Company, we, us or our are to Baker Hughes, a GE company, and its subsidiaries.
1
WHERE YOU CAN FIND MORE INFORMATION
Each time we or any selling security holders offer to sell securities using this prospectus, we will provide a prospectus supplement that will contain specific information about the terms of that offering and may also provide you with a free writing prospectus. The prospectus supplement or free writing prospectus may also add, update or change information contained in this prospectus. This prospectus, together with the applicable prospectus supplement and any free writing prospectus, will include or refer you to all material information relating to each offering.
We file annual, quarterly and current reports, proxy statements and other information with the SEC (File No. 001-38143). Our SEC filings are available to the public over the internet at the SECs website at www.sec.gov and at our website at www.bhge.com. Information that you may find on our website is not part of this prospectus and the inclusion of the website address in this prospectus is an inactive textual reference only.
This prospectus incorporates by reference certain information that BHGE files with the SEC, which means that BHGE can disclose important information to you by referring you to other documents.
The information incorporated by reference is an important part of this prospectus, and information that BHGE files later with the SEC prior to closing this offering will automatically update and supersede this information. BHGE incorporates by reference the following documents and all documents that BHGE subsequently files with the SEC prior to closing this offering under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act) (other than, in each case and except as specifically set forth below, information furnished rather than filed):
| Annual Report on Form 10-K for the year ended December 31, 2017 filed by the Company with the SEC on February 23, 2018 (the Annual Report); |
| The portions of the Definitive Proxy Statement on Schedule 14A filed by the Company with the SEC on March 23, 2018 (the Proxy Statement) that were incorporated by reference into Part III of the Annual Report; |
| Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2018 filed by the Company with the SEC on April 27, 2018, the quarterly period ended June 30, 2018 filed by the Company with the SEC on July 30, 2018 and the quarterly period ended September 30, 2018 filed by the Company with the SEC on October 30, 2018 (together, the Quarterly Reports); |
| Current Reports on Form 8-K, filed by the Company with the SEC on July 3, 2017 (solely incorporating Item 1.01 therein), January 8, 2018, January 26, 2018, May 14, 2018, June 1, 2018 and two reports dated November 13, 2018; |
| The audited financial statements of Baker Hughes Incorporated for each of the two years ended December 31, 2016 and 2015 included in Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2016 filed by Baker Hughes Incorporated (now Baker Hughes, a GE company, LLC) (File No. 001-09397) with the SEC on February 8, 2017; |
| The unaudited condensed consolidated financial statements of Baker Hughes, a GE company, LLC (the successor to Baker Hughes Incorporated) for the three and six months ended June 30, 2017 and 2016 included in Item 1 of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed by Baker Hughes, a GE Company, LLC with the SEC on July 28, 2017; and |
| The descriptions of the Companys Class A common stock and preferred stock contained in the sections entitled Description of New Baker Hughes Capital StockNew Baker Hughes Common Stock and Description of New Baker Hughes Capital StockNew Baker Hughes Preferred Stock in |
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the Amendment No. 2 to the Registration Statement on Form S-4/A filed by the Company with the SEC on May 25, 2017 (the S-4 Registration Statement), including any amendments or reports filed for the purpose of updating such description. |
This prospectus and the information incorporated by reference herein contain descriptions and summaries of certain documents that we have filed with the SEC. These descriptions and summaries do not purport to be complete and are qualified in their entirety by reference to such documents. Copies of such documents can be obtained by following the procedures described below.
Any statement contained in a document incorporated or considered to be incorporated by reference in this prospectus shall be considered to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any subsequently filed information that is or is considered to be incorporated by reference modifies or supersedes such statement. Any statement that is modified or superseded shall not, except as so modified or superseded, constitute part of this prospectus.
You may request a copy of these filings (other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing), at no cost, by writing to us at the following address or calling the following number:
Baker Hughes, a GE company
Attention: Corporate Secretary
17021 Aldine Westfield Road
Houston, Texas 77073
(713) 439-8600
3
THE COMBINATION OF BAKER HUGHES INCORPORATED AND GE OIL & GAS AND OUR RELATIONSHIP WITH BAKER HUGHES, A GE COMPANY, LLC
Baker Hughes, a GE company, LLC (BHGE LLC), a Delaware limited liability company, is the successor to Baker Hughes Incorporated, a Delaware corporation (BHI), and is our indirect subsidiary. On July 3, 2017, we closed our previously announced business combination (the Combined Transactions) to combine the oil and gas business (GE O&G) of General Electric Company (GE) and BHI, pursuant to which substantially all of the business of GE O&G and of BHI was transferred to BHGE LLC. GE has approximately 62.5% of economic interest in BHGE LLC and BHGE has approximately 37.5% of economic interest in BHGE LLC indirectly through two wholly owned subsidiaries. One of these wholly owned subsidiaries of the Company is the sole managing member of BHGE LLC. Although we hold a minority economic interest in BHGE LLC, we conduct and exercise full control over all activities of BHGE LLC, without the approval of any other member, through this wholly owned subsidiary. We are a holding company and have no material assets other than our ownership interest in BHGE LLC and certain intercompany and tax related balances.
The Combined Transactions were treated as a reverse acquisition for accounting purposes and, as such, the historical financial statements of the accounting acquirer, GE O&G, are the historical financial statements of the Company. The Companys financial statements have been prepared on a consolidated basis, effective July 3, 2017. For all periods prior to July 3, 2017, the Companys financial statements were prepared on a combined basis. The combined financial statements combine certain accounts of GE and its subsidiaries that were historically managed as part of its Oil & Gas business.
We and BHGE LLC are two separate entities and, except as may be described in any prospectus supplement containing specific terms for such securities, BHGE LLC will not guarantee any debt securities offered under this prospectus or otherwise have any obligations with respect to any debt securities offered hereby or the indenture governing them. Similarly, GE will not guarantee any debt securities offered hereby or otherwise have any obligations with respect to any debt securities offered hereby or the indenture governing them.
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We have made in this prospectus and in the documents incorporated herein by reference, and may from time to time otherwise make in other public filings, press releases and discussions with our management, forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Exchange Act. All statements, other than historical facts, including statements regarding the presentation of our operations in future reports and any assumptions underlying any of the foregoing, are forward-looking statements. Forward- looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words may, will, should, potential, intend, expect, endeavor, seek, anticipate, estimate, overestimate, underestimate, believe, could, project, predict, continue, target or other similar words or expressions. Forward looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved.
Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, the risk factors identified in the Risk Factors section of the Annual Report, the Quarterly Reports and those set forth from time-to-time in other filings by BHGE with the SEC. These documents are available through our website or through the SECs Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov. Information that you may find on our website is not part of this prospectus and the inclusion of the website address in this prospectus is an inactive textual reference only.
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We are a fullstream oilfield technology provider that has a unique mix of integrated oilfield products, services and digital solutions. We conduct business in more than 120 countries. We operate through our four business segments: Oilfield Services, Oilfield Equipment, Turbomachinery & Processing Solutions, and Digital Solutions. For a further description of our business, properties and operations, you should read the Quarterly Reports and the Annual Report, each of which is incorporated by reference into this prospectus.
| Oilfield Services: Oilfield Services (OFS) provides products and services for on and offshore operations across the lifecycle of a well, ranging from drilling, evaluation, completion, production and intervention. The segment is comprised of eight product lines that design and manufacture products and services to help operators find, evaluate, drill, and produce hydrocarbons. Products and services include diamond and tri-cone drill bits, drilling services, including directional drilling technology, measurement while drilling and logging while drilling, wireline services, drilling and completions fluids, completions tools and systems, wellbore intervention tools and services, artificial lift systems and oilfield and industrial chemicals. |
| Oilfield Equipment: Oilfield Equipment (OFE) provides a broad portfolio of products and services required to facilitate the safe and reliable flow of hydrocarbons from the subsea wellhead to the surface production facilities. The OFE operation designs and manufactures onshore and offshore drilling and production systems and equipment for floating production platforms and provides a full range of services related to onshore and offshore drilling activities. The OFE portfolio includes deepwater drilling equipment, subsea production systems, flexible pipe systems, and related service solutions. |
| Turbomachinery & Process Solutions: Turbomachinery & Process Solutions (TPS) provides equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry as well as products and services to serve the downstream segments of the industry including refining, petrochemical, distributed gas, flow and process control and other industrial applications. The TPS segment is a leader in designing, manufacturing, maintaining and upgrading rotating equipment across the oil and gas, petro-chemical and industrial sectors. The TPS portfolio includes drivers, driven equipment, flow control and turnkey solutions. Drivers are comprised of aero-derivative gas turbines, heavy-duty gas turbines, small- to medium-sized steam turbines, slow speed and integrated gas engines, hot gas and turbo expanders and synchronous and induction electric motors. |
| Digital Solutions: Digital Solutions (DS) provides operating technologies helping to improve the health, productivity and safety of asset intensive industries and enable the Industrial Internet of Things. The DS portfolio includes condition monitoring, inspection technologies, measurement, sensing and pipeline solutions. |
Our principal executive offices are located at 17021 Aldine Westfield Road, Houston, Texas 77073, and our telephone number is (713) 439-8600. We maintain a website on the Internet at http://www.bhge.com. Information that you may find on our website is not part of this prospectus and the inclusion of the website address in this prospectus is an inactive textual reference only.
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You should carefully consider the risk factors in the Risk Factors section of the Annual Report, the Quarterly Reports and those set forth from time-to-time in other filings by us with the SEC before investing in our securities. You should also consider similar information contained in any other document filed by us with the SEC after the date of this prospectus before deciding to invest in our securities. If applicable, we will include in any prospectus supplement a description of those significant factors that could make the offering described therein speculative or risky.
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We may register securities covered by this prospectus for re-offers and resales by any selling security holders to be named in a prospectus supplement. Because we are a well-known seasoned issuer, as defined under Rule 405 under the Securities Act, we may add secondary sales of securities by any selling security holders by filing a prospectus supplement with the SEC. We may register these securities to permit security holders to resell their securities when they deem appropriate. A selling security holder may resell all, a portion or none of their securities at any time and from time to time. We may register those securities for sale through an underwriter or other plan of distribution as set forth in a prospectus supplement. See Plan of Distribution. Selling security holders may also sell, transfer or otherwise dispose of some or all of their securities in transactions exempt from the registration requirements of the Securities Act. We may pay some or all of the expenses incurred with respect to the registration of securities owned by selling security holders, other than underwriting fees, discounts or commissions, which will be borne by the selling security holders. We will provide you with a prospectus supplement naming the selling security holders, the amount of securities to be registered and sold and other terms of the securities being sold by a selling security holder.
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Unless specified otherwise in the applicable prospectus supplement, we expect to use the net proceeds we receive from the sale of the securities offered by this prospectus and the accompanying prospectus supplement for general corporate purposes, which may include, among other things:
| acquisitions; |
| working capital; |
| capital expenditures; |
| repurchases of our common stock; and |
| repayment of debt. |
9
DESCRIPTION OF DEBT SECURITIES
The debt securities will constitute either senior or subordinated debt of BHGE. The debt securities that are sold may be exchangeable for and/or convertible into common shares or any of the other securities that may be sold under this prospectus. The debt securities will be issued under one or more separate indentures between us and a designated trustee. We will include in a prospectus supplement the specific terms of each series of senior or subordinated debt securities being offered, including the terms, if any, on which a series of senior or subordinated debt securities may be convertible into or exchangeable for other securities. In addition, the material terms of any indenture, which will govern the rights of the holders of our senior or subordinated debt securities will be set forth in the applicable prospectus supplement.
DESCRIPTION OF GUARANTEES OF DEBT SECURITIES
We may issue guarantees of our or any of our subsidiaries debt securities which may be secured or unsecured and which may be senior, subordinated or junior subordinated. Each series of guarantees will be issued under an indenture among us, the issuer of the underlying debt securities and the applicable trustee. The prospectus supplement relating to a particular issue of guarantees will describe the terms of those guarantees, including the following, to the extent applicable: the series of debt securities to which the guarantees apply; whether the guarantees are secured or unsecured; whether the guarantees are senior or subordinated; the terms under which the guarantees may be amended, modified, waived, released or otherwise terminated, if different from the provisions applicable to the guaranteed debt securities; and any additional terms of the guarantees. To the extent the applicable prospectus supplement or other offering materials relating to an offering of guarantees of debt securities are inconsistent with this prospectus, the terms of that prospectus supplement or other offering materials will supersede the information in this prospectus.
DESCRIPTION OF CLASS A COMMON STOCK
When we or any selling security holders offer to sell Class A common stock, we will describe the manner in which the Class A common stock is sold in the applicable prospectus supplement. All outstanding shares of Class A common stock are fully paid and non-assessable. For descriptions of the material terms of our amended and restated certificate of incorporation (certificate of incorporation) and second amended and restated bylaws (bylaws), we refer you to the descriptions included in the S-4 Registration Statement which are incorporated by reference into this prospectus. In addition, copies of the certificate of incorporation and bylaws are filed with the SEC as exhibits to our Current Report on Form 8-K12B filed on July 3, 2017 and our Quarterly Report on Form 10-Q for the three months ended September 30, 2017 filed on October 31, 2017, respectively, and you should read the certificate of incorporation and bylaws for the provisions that are important to you.
DESCRIPTION OF PREFERRED STOCK
When we offer to sell a particular series of preferred stock, we will describe the specific terms of the securities in the applicable prospectus supplement. The preferred stock will be issued under a certificate of designations relating to each series of preferred stock and is also subject to our certificate of incorporation. For descriptions of the material terms of our certificate of incorporation and bylaws, we refer you to the descriptions included in the S-4 Registration Statement which are incorporated by reference into this prospectus. In addition, copies of the certificate of incorporation and bylaws are filed with the SEC as exhibits to the Current Report on Form 8-K12B filed on July 3, 2017 and the Quarterly Report on Form 10-Q for the three months ended September 30, 2017 filed on October 31, 2017, respectively, and you should read the certificate of incorporation and bylaws for the provisions that are important to you.
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DESCRIPTION OF PURCHASE CONTRACTS
When we offer to sell purchase contracts, we will describe the specific terms of the securities in the applicable prospectus supplement. We may issue purchase contracts for the purchase or sale of:
| debt or equity securities issued by us or our subsidiaries or debt or equity securities of third parties, a basket of such securities, an index or indices or such securities or any combination of the foregoing as specified in the applicable prospectus supplement; |
| currencies; or |
| commodities. |
Each purchase contract will entitle the holder thereof to purchase or sell, and obligate us to sell or purchase, on specified dates, such securities, currencies or commodities at a specified purchase price, which may be based on a formula, all as set forth in the applicable prospectus supplement. We may, however, satisfy our obligations, if any, with respect to any purchase contract by delivering the cash value of such purchase contract or the cash value of the property otherwise deliverable or, in the case of purchase contracts on underlying currencies, by delivering the underlying currencies, as set forth in the applicable prospectus supplement. The applicable prospectus supplement will also specify the methods by which the holders may purchase or sell such securities, currencies or commodities and any acceleration, cancellation or termination provisions or other provisions relating to the settlement of a purchase contract.
The purchase contracts may require us to make periodic payments to the holders thereof or vice versa, which payments may be deferred to the extent set forth in the applicable prospectus supplement, and those payments may be unsecured or prefunded on some basis. The purchase contracts may require the holders thereof to secure their obligations in a specified manner to be described in the applicable prospectus supplement. Alternatively, purchase contracts may require holders to satisfy their obligations thereunder when the purchase contracts are issued. Our obligation to settle such pre-paid purchase contracts on the relevant settlement date may constitute indebtedness. Accordingly, pre-paid purchase contracts will be issued under either the senior indenture or the subordinated indenture.
When we offer to sell units, consisting of one or more purchase contracts, debt securities, shares of preferred stock, shares of Class A common stock or any combination of such securities, we will describe the specific terms of the securities in the applicable prospectus supplement, which will include:
| the terms of the units, debt securities and Class A common stock comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately; |
| a description of the terms of any unit agreement governing the units; and |
| a description of the provisions for the payment, settlement, transfer or exchange of the units. |
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Each debt security, guarantee of debt securities or unit will be represented either by a certificate issued in definitive form to a particular investor or by one or more global securities representing the entire issuance of securities. Certificated securities in definitive form and global securities will be issued in registered form. Definitive securities name you or your nominee as the owner of the security, and in order to transfer or exchange these securities or to receive payments other than interest or other interim payments, you or your nominee must physically deliver the securities to the trustee, registrar, paying agent or other agent, as applicable. Global securities name a depositary or its nominee as the owner of the debt securities, guarantees of debt securities or units represented by these global securities. The depositary maintains a computerized system that will reflect each investors beneficial ownership of the securities through an account maintained by the investor with its broker/dealer, bank, trust company or other representative, as we explain more fully below.
Global Securities
Registered Global Securities. We may issue the registered debt securities, guarantees of debt securities or units in the form of one or more fully registered global securities that will be deposited with a depositary or its nominee identified in the applicable prospectus supplement and registered in the name of that depositary or nominee. In those cases, one or more registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal or face amount of the securities to be represented by registered global securities. Unless and until it is exchanged in whole for securities in definitive registered form, a registered global security may not be transferred except as a whole by and among the depositary for the registered global security, the nominees of the depositary or any successors of the depositary or those nominees.
If not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a registered global security will be described in the prospectus supplement relating to those securities. We anticipate that the following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with the depositary or persons that may hold interests through participants. Upon the issuance of a registered global security, the depositary will credit, on its book-entry registration and transfer system, the participants accounts with the respective principal or face amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities will designate the accounts to be credited. Ownership of beneficial interests in a registered global security will be shown on, and the transfer of ownership interests will be effected only through, records maintained by the depositary, with respect to interests of participants, and on the records of participants, with respect to interests of persons holding through participants. The laws of some states may require that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair your ability to own, transfer or pledge beneficial interests in registered global securities.
So long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee, as the case may be, will be considered the sole owner or holder of the securities represented by the registered global security for all purposes under the applicable indenture or unit agreement. Except as described below, owners of beneficial interests in a registered global security will not be entitled to have the securities represented by the registered global security registered in their names, will not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered the owners or holders of the securities under the applicable indenture or unit agreement. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered global security and, if that person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the applicable indenture or unit agreement. We understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any action that a holder is entitled to give
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or take under the applicable indenture or unit agreement, the depositary for the registered global security would authorize the participants holding the relevant beneficial interests to give or take that action, and the participants would authorize beneficial owners owning through them to give or take that action or would otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on debt securities, and any payments to holders with respect to guarantees of debt securities or units, represented by a registered global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the registered global security. None of BHGE, the trustees, the warrant agents, the unit agents or any other agent of BHGE, agent of the trustees or agent of the warrant agents or unit agents will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests.
We expect that the depositary for any of the securities represented by a registered global security, upon receipt of any payment of principal, premium, interest or other distribution of underlying securities or other property to holders on that registered global security, will immediately credit participants accounts in amounts proportionate to their respective beneficial interests in that registered global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a registered global security held through participants will be governed by standing customer instructions and customary practices, as is now the case with the securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of those participants.
If the depositary for any of these securities represented by a registered global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency registered under the Securities Exchange Act of 1934, and a successor depositary registered as a clearing agency under the Securities Exchange Act of 1934 is not appointed by us within 90 days, we will issue securities in definitive form in exchange for the registered global security that had been held by the depositary. Any securities issued in definitive form in exchange for a registered global security will be registered in the name or names that the depositary gives to the relevant trustee, warrant agent, unit agent or other relevant agent of ours or theirs. It is expected that the depositarys instructions will be based upon directions received by the depositary from participants with respect to ownership of beneficial interests in the registered global security that had been held by the depositary.
We or any selling security holders may offer and sell these securities to or through one or more underwriters, in at-the market offerings (as defined in Rule 415 promulgated under the Securities Act) to or through market makers or into an existing market for the securities, to dealers and agents, directly to purchasers, on a continuous or delayed basis, through a combination of any of these methods of sale or through any other methods described in a prospectus supplement. We will provide the specific plan of distribution for any securities to be offered in an accompanying prospectus supplement.
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Unless otherwise indicated in the applicable prospectus supplement, the validity of the securities offered under this prospectus will be passed upon for us by Davis Polk & Wardwell LLP, our outside counsel. Additional legal matters may be passed on for us, or any underwriters, dealers or agents, by counsel we will name in the applicable prospectus supplement.
The consolidated and combined financial statements as of and for the year ended December 31, 2017, included from Exhibit 99.2 to BHGEs Current Report on Form 8-K dated November 13, 2018, have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, dated February 23, 2018, except as to Note 1, which is as of November 13, 2018, which is incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2017 consolidated and combined financial statements refers to a change in the Companys method of accounting for revenue recognition in 2018 due to the adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers, discussed in Note 1 to the consolidated and combined financial statements.
Managements assessment of the effectiveness of internal control over financial reporting as of December 31, 2017, is incorporated herein by reference from BHGEs Annual Report on Form 10-K for the year ended December 31, 2017 in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The combined financial statements as of and for the year ended December 31, 2016 included from Exhibit 99.2 to BHGEs Current Report on Form 8-K dated November 13, 2018 have been incorporated by reference herein in reliance upon the report of KPMG S.p.A., independent registered public accounting firm, dated March 16, 2017, except as to Note 17, which is as of December 4, 2017 and Note 1, which is as of November 13, 2018, which is incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2016 consolidated and combined financial statements refers to a change in the Companys method of accounting for revenue recognition in 2018 due to the adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers, discussed in Note 1 to the combined financial statements.
The combined financial statements of GE O&G for the year ended December 31, 2015, incorporated in this prospectus by reference from BHGEs Annual Report on Form 10-K for the year ended December 31, 2017, have been audited by KPMG S.p.A., an independent registered public accounting firm, as stated in their report dated March 16, 2017, except as to Note 15, which is as of December 4, 2017.
The consolidated financial statements and the related financial statement schedule II, incorporated in this prospectus by reference from BHIs Annual Report on Form 10-K for the year ended December 31, 2016 and the effectiveness of BHIs internal control over financial reporting have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report dated February 7, 2017, which is incorporated herein by reference. Such financial statements and financial statement schedule have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
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105,000,000 Shares
Baker Hughes, a GE company
Class A Common Stock
PRELIMINARY PROSPECTUS SUPPLEMENT
, 2019