General Electric Cois looking to raise up to $3 billion in sale of majority-owned Baker Hughes shares, resulting in a reduction of the U.S industrial conglomerate's stake in the oilfield services provider to less than 50%, Baker Hughes said on Tuesday.

Shares of Baker Hughes, in which GE owns an about 50.4% stake as of June 30, fell 3.7% to $23.20 in after hours trading.

GE's cash generation has failed to keep pace with earnings in recent years, raising concerns that GE's actual financial performance was falling short of stated results.

The company has cut its dividend and divested non-core assets in order to raise cash to meet its financial obligations.

GE has said previously that a reduction in its ownership interest below 50% in Baker Hughes will result in GE 'deconsolidating' its oil and gas business.

As part of the deal, GE is looking to sell up to 120.75 million shares, including over-allotment option, of Baker Hughes' Class A common in a secondary offering. Baker Hughes will additionally repurchase $250 million of Class B common stock from GE in a private transaction.

GE currently owns about 522 million shares of Baker Hughes.

Baker Hughes said the deal would also shrink the industrial conglomerate's presence on the oilfield services company's board to one from five seats.

General Electric wants John Rice to be its designated member on the Baker Hughes board, while Lorenzo Simonelli and Geoffrey Beattie are expected to continue as directors, but not as GE representatives.