Industrial conglomerate Siemens AG has announced today that it will buy US oilfield equipment maker Dresser-Rand Group Inc for US$ 7.6 billion (£4.6 billion) in a move that would significantly boost the German company's oil and gas business in North America.
Siemens said its US$ 83 per-share bid was unanimously supported by Dresser-Rand's board of directors.
That compares with a Friday closing price of US$ 79.91, which was up 27% over the past three months on takeover speculation.
Within minutes of that statement, it also announced the sale of its 50% stake in BSH Bosch und Siemens Hausgeraete GmbH to joint venture partner Robert Bosch GmbH for €3 billion (£2.3 billion), ending their more than 45 year alliance in household appliances.
"As the premium brand in the global energy infrastructure markets, Dresser-Rand is a perfect fit for the Siemens portfolio. The combined activities will create a world-class provider for the growing oil and gas markets," Siemens Chief Executive Joe Kaeser said in a statement on Monday.
Reuters reported on Sunday that the companies were nearing a deal.
The acquisition is in line with Siemens Chief Executive Joe Kaeser's aim of building up the company's presence in the US energy market and capitalising on the shale-gas boom.
Siemens produces gas turbines and supplies equipment for companies that extract natural gas. The merger with Dresser-Rand, which produces compressors, turbines and other rotating equipment, would allow Siemens to expand its gas-extraction capabilities and more directly profit from hydraulic fracturing in the US.
Siemens's large supply-chain network would enable it to harness Dresser-Rand's profitable business in spare parts and a "very high recurring stream of revenues," said Robert Norfleet, an analyst with Alembic Global who covers Dresser-Rand.
At the same time, analysts say Dresser-Rand is poised to benefit from growing demand for compressors for offshore oil-production platforms spurred by expansion of the U.S. energy industry.
The transaction, which still requires regulatory approval, will probably be completed in the 2015 first half.
Edited from various sources by Elizabeth Corner
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/22092014/siemens-to-buy-dresser-rand-group/