GE arm buys 5% stake in Adnoc unit.

Baker Hughes, the world's second-largest oil services company, will take a 5 per cent stake in Abu Dhabi National Oil Company's (Adnoc) drilling unit for $550 million under a tie-up announced on Monday.

Baker Hughes, a subsidiary of General Electric Co, becomes the first foreign company to take a stake in one of state-owned Adnoc's services companies under the agreement, which values Adnoc Drilling at about $11 billion, including $1 billion in debt.

The deal will allow Baker Hughes to cement its presence in the Middle East, the fastest growing region for oil and gas operations, and enable Adnoc Drilling to gain access to the know-how and technical expertise of a global player.

The transaction is expected to close before the end of this year, with operations starting in 2019, Adnoc and BHGE said in a joint statement.

"The partnership forms an important building block of Adnoc's 2030 smart growth strategy," said Dr Sultan bin Ahmad Sultan Al Jaber, Minister of State and chief executive of Adnoc Group.

He said the combined capabilities and expertise from this partnership will create greater drilling efficiencies and faster well completion times, generate attractive returns and enable the transfer of know-how and access to technology. "Importantly, it will also drive job creation and economic growth, as well as maintain a healthy level of competition in...