Oil Products and Services Company Dresser-Rand to be acquired by Siemens
Siemens which is a German engineering conglomerate announced a deal to acquire oil services and products company Dresser-Rand Group.
The deal which is worth about $7.6 billion includes the assumption of debt and gives Siemens prominence in the American energy sector which is booming as new reserves of natural gas and oil are tapped through unconventional drilling techniques.
In recent months, Dresser-Rand has been fielding inquiries from potential buyers and it has also hired advisers to vet the bids. However, Siemens outbid other suitors with an all-cash bid of $83 per share.
Siemens’ chief executive, Joe Kaeser said that Dresser-Rand is a perfect fit for the Siemens portfolio. He added that with this deal, Dresser-Rand will become the oil and gas company within Siemens.
Other companies that had been pursuing a deal included the Swiss pump maker Sulzer, which acknowledged last week that it was in talks with Dresser-Rand. General Electric was considering bidding for Dresser-Rand as well; however people cognizant on General Electric’s plans said the company was never in serious discussions about making an offer.
For Mr. Kaeser, winning the bidding war for Dresser-Rand would be a great success for the company. Siemens lost out to G.E. for the energy assets being sold by the French industrial group, Alstom. Siemens already makes some equipment and products for the United States energy sector which includes a range of gas turbines.
Dresser-Rand, which is headquartered in Texas and Paris, has annual revenue of around $3 billion and employs around 8,100 people. Siemens is expanding its exposure to the industry as technology for the extraction method called hydraulic fracturing, opens huge swaths of land to drilling.
Siemens, with a market value of almost $85 billion, is a larger company than Dresser-Rand and through its sales operation it will sell products of Dresser-Rand.