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   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt"&gt;&lt;b&gt;NOTE 2. PENDING ACQUISITION&lt;/b&gt;
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;On August&amp;#160;30, 2009, the Company and its subsidiary and BJ Services Company (&amp;#8220;BJ Services&amp;#8221;)
   entered into a merger agreement (the &amp;#8220;Merger Agreement&amp;#8221;) to which the Company will acquire 100% of
   the outstanding common stock of BJ Services in exchange for newly issued shares of the Company&amp;#8217;s
   common stock and cash. BJ Services is a leading provider of pressure pumping and oilfield
   services. The Merger Agreement and the merger have been approved by the Board of Directors of both
   the Company and BJ Services. Consummation of the merger is subject to the approval of the
   stockholders of the Company and BJ Services stockholders, regulatory approvals, and the
   satisfaction or waiver of various other conditions as more fully described in the Merger Agreement.
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;Subject to receipt of all required approvals, it is anticipated that closing of the merger
   will occur in the first quarter of 2010. Under the terms of the Merger Agreement, each share of BJ
   Services common stock will be converted into the right to receive 0.40035 shares of the Company&amp;#8217;s
   common stock and $2.69 in cash. Baker Hughes has estimated the total consideration expected to be
   issued and paid in the merger to be approximately $6.0&amp;#160;billion, consisting of approximately $0.8
   billion to be paid in cash and approximately $5.2&amp;#160;billion to be paid through the issuance of
   approximately 118&amp;#160;million shares of Baker Hughes common stock valued at the October&amp;#160;7, 2009,
   closing share price of $43.67 per share. The value of the merger consideration will fluctuate
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   Services common shares and options outstanding at the closing date.
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