Oil services group Weatherford is to sell off its pipeline arm to rival Baker Hughes in a £152million deal after being hit by falling profits.
The Geneva-based firm, which plans to cut up to 7000 jobs this year, has agreed to sell the pipeline and specialty services as it tries to cut back on non-core assets.
The deal will see Baker Hughes paying $241million in cash for the division, with the rest in retained working capital.
“This sale is an important first step towards Weatherford’s refocus on its core businesses and becoming a leaner, more efficient and stronger company,” said Weatherford chief executive Bernard Duroc-Danner.
“We are pleased to have reached an agreement on the sale of this business to Baker Hughes, which complements their existing process and pipeline services business.
“We believe that Baker Hughes is really well positioned to maximize the potential of this business.”
The firm, which has a significant presence in Aberdeen to support North Sea projects, was hit by a downturn in full-year profits for 2013, leading to plans to make $500million in savings and cut 10% of its workforce.
Baker Hughes chief executive Martin Craighead said the deal would strengthen the firm’s midstream business.
“The addition of Weatherford’s pipeline and specialty services not only will augment our asset assurance and integrity capabilities, but also will help us leverage our existing technologies and global supply chain network into profitable, growing markets,” he added.
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