An overwhelming majority of Hughes ToolCo shareholders approved a merger agreement with Baker
International Corp based on revised terms that allow the
companies additional time to sell a drilling bit business as
required by the U.S. Justice Department.
     Hughes chairman William Kistler said the revised terms of
the proposed consent decree also set a 10 mln dlr cap on how
much funding the newly combined companies will have to spend on
the disputed drilling bit business until it is sold.
    An earlier proposed consent decree did not establish a
funding limit.
    The Baker-Hughes merger, which would would create a 1.2
billion dlr oilfield services company, almost fell through
earlier this month when Hughes balked at terms of a proposed
Justice Department consent decree that would have given the
companies only three months to find a buyer for the Reed
business.
    Baker said today it would withdraw the one billion dlr
lawsuit it had filed to force Hughes to follow through with the
merger.
    Hughes' Kistler, speaking to reporters after 85 pct of
Hughes' shareholders approved the merger, said the revised
terms of the agreement give the companies six months to find a
buyer for the Reed drilling bit business. The previous
agreement had proposed a three-month period.
    Kistler said the the government had also indicated it would
consider granting, if necessary, an additional three-month
extension to complete the sale.
    He said there were "several people looking" at the domestic
drilling bit business.
    The companies, Kistler said, have also decided to
voluntarily sell a Reed plant in Singapore.
    Kistler estimated that the merger, which should be
completed in about two weeks, will result in annual cost
savings of about 50 mln dlrs. He said he expects "substantial
cutbacks" in the 20,000-member workforce at Baker-Hughes Inc,
the name the merged company will take.
    Kistler said the cost savings and greater efficiencies
should put the company on a profitable course. "We think that
in the third or fourth quarter after the merger we should see
something close to breakeven," he said.
    In the fourth quarter of 1986, Hughes earned 31.7 mln dlrs
on sales of 215.7 mln dlrs.
    Baker, in its first fiscal quarter ended December 31, lost
34.2 mln dlrs on revenues of 297.7 mln dlrs.
 Reuter
